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SAN FRANCISCO PUBLIC LIBRARY 



3 1 



223 03273 9774 




San Francisco Public Library 



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REFERENCE BOOK 



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HEARING 



DOCUMENTS DEPT. 

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SAN FRANCISCO 
PUBLIC LIBRARY 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 

^ Ley ' '*-''""' 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MARCH 1, 2000 
1:36 P.M. 



390-R 



SENATE RULES COMMITTEE 



STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 



ROOM 113 



SACRAMENTO, CALIFORNIA 



WEDNESDAY, MARCH 1, 2 000 



1:36 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



4 49386 SFPL: ECONO JRS 
88 SFPL 07/07/03 12 



3 1223 03273 9774 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

SENATOR JACK ' CONNELL 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

BRIAN KELLY, Transportation Consultant to Pro Tern 

ALSO PRESENT 

ROBERT J. ABERNETHY, Member 
California Transportation Commission 

SENATOR JIM COSTA 

JEREMIAH F. HALLISEY, Member 
California Transportation Commission 

STEVE BAKER 

Professional Engineers in California Government 

SEAN HARRIGAN, Member 
State Personnel Board 



Ill 



TOM RANKIN 

California Labor Federation, AFL-CIO 

AARON READ 

California Association of Highway Patrolmen 

CDF Firefighters 

Professional Engineers in California Government 



IV 

INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

ROBERT J. ABERNETHY, Member 

California Transportation Commission 1 

Introduction and Support by 

SENATOR JIM COSTA 1 

Opening Statement 1 

Questions by SENATOR LEWIS re: 

Opinion on HOV Lanes 2 

Governor's Suggestion in Proposed 

Budget that STIP be lengthened from 

Current Four Years to Seven Years 3 

Questions by SENATOR HUGHES re: 

Consistency to Diamond Lanes 4 

Big Rigs Parking Adjacent to Freeways 6 

Questions by SENATOR KNIGHT re: 

STIP Going from Four Years to Seven 6 

Need to Improve Blood Alleys 7 

Consideration of Safety in 

Prioritizing Projects 8 

Response by SENATOR COSTA 8 

Questions by CHAIRMAN BURTON re: 

Ideas on Funding when Local Option Sales 

Tax Measures Run 'Out 9 

Theory on Extending STIP to Seven Years 10 



Questions by BRIAN KELLY re: 

Inability of Caltrans to Deliver 

Additional Projects 11 

Questions by SENATOR KNIGHT re: 

Extending Time Period of STIP Is 

Extending the Time Period for Projects 12 

Motion to Confirm 13 

Committee Action 14 

JEREMIAH F. HALLISEY, Member 

California Transportation Commission 14 

Support by SENATOR JIM COSTA 14 

Questions by CHAIRMAN BURTON re: 

Comments on Changing SENATOR KOPP's 

Policies 14 

Opening Statement 15 

Questions by CHAIRMAN BURTON re: 

Hours of Use of Diamond Lanes . . .' 16 

Authority for Restricting Use of 

HOV Lanes 17 

Influence of Commission on Appointing 

Authority 17 

Various Bonds 18 

Need for Statewide Ballot Measure Bond 21 

Questions by SENATOR HUGHES re: 

Promise to Help Find Answers to 

Previous Questions about HOV 

Consistency and Big 'Rig Parking 22 

Motion to Confirm 22 



VI 



Witness in Support: 

STEVE BAKER 

Professional Engineers in California Government 23 

Committee Action 24 

SEAN HARRIGAN, Member 

State Personnel Board 24 

Introduction and Support by 

CHAIRMAN BURTON 24 

Opening Statement 24 

Motion to Confirm 25 

Witnesses in Support: 

TOM RANKIN 

California Labor Federation, AFL-CIO 25 

AARON READ 

California Highway Patrol Association 

CDF Firefighters 

Professional Engineers in California Government 25 

Committee Action 26 

Termination of Proceedings 2 6 

Certificate of Reporter 27 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: We have Governor's appointees, 
Robert Abernethy, Member, California Transportation Commission. 

Senator Costa. 

SENATOR COSTA: Thank you very much, 
Mr. Chairman, Members of the Senate Rules Committee. 

Very briefly, I think that on occasion we have 
opportunities to work with individuals that we think would make 
outstanding appointments to the state for public service 
purposes, and we have several individuals today that fall in 
that category in my opinion, one of them being the gentleman 
right next to me at this time. 

Mr. Abernethy, whom I've known for a number of 
years and worked on a number of different issues with, and I 
want to commend the Governor for his appointment to the 
California Transportation Commission. I think he'll make an 
excellent appointee. 

He is well versed on issues involving both the 
public and the private sector, and cares a great deal about 
improving transportation in California, knows its importance, 
and thinks that the Senator from San Francisco, Senator Burton, 
is doing an admirable job in his efforts to pursue California 
transportation policy. 

I wholeheartedly support his appointment. 

MR. ABERNETHY: Mr. President, Senators, it's a 
delight for me to be here with you. And I have enjoyed very 
much in a preliminary sort of way serving with a wonderful set 



of colleagues on the Transportation Commission. 

I hope that you make that service sustainable in 
the future. 

I've found my colleagues, including our Executive 
Director, to be very intelligent people, hard working, very 
congenial. It's been a lot of fun and a great pleasure to have, 
in an interim sort of capacity, to have served with them in 
their programming of funds, and their allocation of budget and 
their advising of the Governor on the business of 
transportation, the Secretary, and also in their role of 
advising the Senate and Assembly on transportation issues. 

I look forward to continued service. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: I was wondering if you could 
share with me your opinion of HOV lanes, in view that there have 
been a lot of studies recently. What do you think about whether 
or not they're maximizing? 

MR. ABERNETHY: I could do that on two levels. 
One is the personal level, and one is the frustration I see when 
I'm driving in a vehicle by myself, and I look over on the left, 
and there are others that are rapidly speeding by, but only 
occasionally so. Indeed, it's a frustrating experience. 

I think it's — they're a lofty objective. There 
are federal requirements associated with the receipt of funds 
that we have to adopt them. 

I think that we need to continue to apply 
operation research and doing theory analysis to them to fine 
tune how they're used, and combine that with a liberal dose of 



public psychology to understand by use of hours, by use of 
definition of what constitutes an HOV vehicle, that we're making 
as best use as we can of those lanes. 

SENATOR LEWIS: A few years ago, Senator Kopp 
successfully passed legislation that shortened the STIP from 
seven years to four years. 

My understanding is the Governor, under the 
Governor's proposed budget, is suggesting that we go back to the 
seven year period. 

How do you view that? What's the implication of 
all this? 

MR. ABERNETHY: Well, I think that allows us to 
put programs into the STIP that we otherwise would not be able 
to put in, and begin to do some of the engineering work and 
environmental work on them, and begin to make some wise 
additional choices on some of the use of the backlog of funds 
that we have today that we've been unable to use. 

SENATOR LEWIS: So, Senator Kopp led us down the 
wrong path? 

MR. ABERNETHY: Is that a Kopp-out question? 

No, I won't say he led us down the wrong path. 
You know, times change, situations change, the economy changes. 
He was here then; he's not here now. We have different — we 
have a different economy, a different budget surplus. 

I think it's appropriate that we consider new 
challenges. 

SENATOR LEWIS: Thank you. 

CHAIRMAN BURTON: Senator Hughes. 



SENATOR HUGHES: Thank you very much. 

Mr. Abernethy, you've been on the Commission for 
a while now. This is a question that I asked Mr. Medina when he 
first came on board, and I wonder if he has brought it before 
your board. 

What are you going to do, if anything, to adding 
consistency to the whole concept of Diamond Lanes, both in 
Northern and Southern California? In Southern California, we 
have some Diamond Lanes that don't have hours attached. You 
have Diamond Lanes in Northern California that have hours 
attached. 

The signs are so small, you barely get to see 
that it says the Diamond Lanes, use during certain hours, until 
you're right up on the Diamond Lane practically. 

And why is it some places two passengers or more, 
and others three passengers or more? 

If you're a new driver to the state, how will you 
ever learn what a Diamond Lane means if it means different 
things in different geographical locations? What value, if any, 
is embarked in consistency? 

MR. ABERNETHY: Senator, here again, I know I'm 
very frustrated by Diamond Lanes. I believe that personally, in 
that our studying of the use of Diamond Lanes, HOV lanes, in 
trying to get the maximum benefit for the dollars that we've 
invested in them, and there are some huge amounts of money spent 
on their creation, that we need to keep open allowing different 
definitions for different Diamond Lanes. 

If we were to standardize completely, to have one 



definition that goes across the whole state, all highway 
situations, I believe that it would be at a cost that it would 
decrease the through-put that we were getting currently on the 
Diamond Lanes. Whereas, our objective should be to increase the 
number of cars that are being traveled there through careful 
study of the operation of those lanes. 

Clearly, you've described, and you're absolutely 
right, that we need better signage for the Diamond Lanes. We 
need more frequent signs, more visible, larger signs. I think 
that is an item that we need to accomplish. 

SENATOR HUGHES: Do you have any plans for seeing 
that we accomplish that? You personally, as a Member, I'm 
asking you. Will that be something that you will be trying to 
change? 

MR. ABERNETHY: Yes, you have given me an idea 
today that I hadn't had before that I'm going to go work on. 

SENATOR HUGHES: Okay. 

You know, it really boggles my mind when you are 
riding by yourself, you're trying to obey the speed limits, and 
you see someone over there in the Diamond Lane that doesn't have 
the number of passengers that they should have, and they're 
abusing it, and they're riding right along. And you can be over 
on your side, doing the right thing, and you get the ticket, and 
they get free. 

MR. ABERNETHY: Very frustrating. I've been 
there. 

SENATOR HUGHES: The other question I want to ask 
you is, when I drive along, I see that some of the Caltrans land 



6 

that's adjacent to a freeway is sometimes used for big rigs to 
stop their vehicles and stay several hours. 

What is the procedure? What's the law — I don't 
know, so I'm asking you -- in terms of how many hours they can 
stay? Are they just allowed to park there if they're extremely 
sleepy to keep from being a hazard on the road? And when 
they're close to a local street sometimes they're almost 
blocking the passage of the local traffic. 

Are you aware of that? 

MR. ABERNETHY: Senator, I do not know the answer 
to that question. I will find out and let your office know. 

SENATOR HUGHES: I gave you a lot of homework. 

MR. ABERNETHY: Yes, ma'am. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 

What's magical about four or seven years for the 
STIP? 

MR. ABERNETHY: I'm not sure that any particular 
number is magical. 

SENATOR KNIGHT: Then why are we trying to go to 
seven? 

MR. ABERNETHY: To allow us to program in 
additional highway projects that we wouldn't be able to under 
the shorter number of years. 

SENATOR KNIGHT: Then why not ten years? 

MR. ABERNETHY: Well, I don't know why not. I 
don't know why seven. I didn't choose seven. It seems to me to 



be an appropriate length of time, but one could have made a 
shorter or longer choice. 

SENATOR KNIGHT: I guess another question, we 
have been talking about the Diamond Lanes, and congestion, and 
trying to free up congestion. But, you know, I don't see 
anybody .getting killed on a Diamond Lane, but I've got some 
roads that people are getting killed on. And we're having a 
heck of a time trying to get those roads widened and improved to 
cover safety considerations. 

Do you have any thoughts about, you know, 
budgeting programs on the STIP, et cetera, for two-lane roads 
that have become congested to the point where the traffic is 
killing people not just stopping them? 

MR. ABERNETHY: Yes. At our last Commission 
meeting, we addressed one particular situation like that and 
voted funds to help solve the problem and authorized the taking 
of land. 

I think that's an important ongoing item that we 
should be addressing each meeting we have, because I think there 
are lots of places across the state where roadway maintenance 
that involves safety issues needs to be done, and where 
widening, and particularly around curves, needs to take place, 
from both of our shop procedures and our STIP procedures that we 
need to do on a continuing basis. 

SENATOR KNIGHT: Which one did you approve last 
month? 

MR. ABERNETHY: I've forgotten the name of it, 
but I'll get that to you. 



8 

SENATOR KNIGHT: Are there considerations for 
safety in trying to prioritize various projects? Does safety 
have a high consideration in judging those programs? 

MR. ABERNETHY: Yes, Senator. I think it has a 
very important and very essential place. 

SENATOR KNIGHT: Is it formalized? Is there some 
way that, say, I could put in a position paper and indicate that 
there is a considerable safety impact here and raise the 
priority of some program? 

MR. ABERNETHY: Yes. 

SENATOR KNIGHT: That's formalized that safety is 
a recognizable consideration? 

MR. ABERNETHY: It's certainly formalized to the 
extent that is a topic that's been in every one of our 
Commission meetings, one way or another. It's always there in 
our formal agenda. 

SENATOR COSTA: Senator Knight, I can tell you 
from recent experiences, there's several state routes over the 
years that have been labeled Blood Alley in your district, in my 
district, and elsewhere. 

I know just recently, the pass from Kern County 
into San Luis Obispo on Shalone, where the famous James Dean was 
killed back in the '50s, that has become a big safety hazard. 
We've had fatalities and tragic accidents that have occurred 
there . 

The CTC and the Department of Transportation have 
responded. We've put in barriers. We've put in turn-out lanes, 
and we've done other safety efforts along with the California 



Highway Patrol to focus. 

So, I know if communities in areas come together, 
there is responsiveness on part of the Commission and the 
Department to try to deal with those state routes that do get 
labeled Blood Alleys. And I think that you'll find this 
Commission Member responsive. 

SENATOR KNIGHT: Okay. 

CHAIRMAN BURTON: Is the counselor's answer 
satisfactory to you? 

SENATOR KNIGHT: Not necessarily satisfactory, 
but it's the only one I'm going to get. 

CHAIRMAN BURTON: I'm confused about the four to 
seven year deal myself. I know it's not your thing; it's the 
Governor's thing, but I'm missing something. 

I mean, I would think that what we're trying to 
do is expedite a lot of these projects, as opposed to stretching 
them out and stretching them out. It just means -- I don't know 
what it means. I'll get back to that. 

We've got a tremendous problem in many counties 
that basically have the local option sales tax. They've 
contributed about 18 billion for highways, roadways and transit. 
The renewal of these measures are coming up. I think they're 
going to start in 2002 just keep going. 

If that runs out, or if they're unable by the 66 
percent vote to do that, do you have any ideas how we're going 
to find the necessary funding to deal what is, I think it's 
almost over the next 20 years, close to $100 billion worth 
stuff. 



10 

Have you been able give much thought to that? 

MR. ABERNETHY: Yes. Hopefully, we won't have to 
find the replacement source for the sales tax dollars. 

As you, I think, are aware, the Commission is on 
record as having supported SCA 3. And I know the problem is 
substantial. It is time phased, and it grows as you go 
chronologically down the lane. 

I'm in hopes that we're going to be able to find 
a way, one way or another, to allow those — I think it's 16 
counties currently have sales tax overrides that go to 
transportation — to be able to continue them, and allow the 
others counties that have not yet adopted them to still have the 
feasible and reasonable possibility of adopting them if they 
want to do so. 

CHAIRMAN BURTON: The question's been asked by 
two Members about extending the STIP back to seven years, which 
I assume takes legislation, which I assume probably won't 
happen. 

But the theory behind that, if you don't mind 
repeating it so that Brian can hear it, Bob. 

MR. ABERNETHY: Sure, and you understand, these 
are my own comments. 

CHAIRMAN BURTON: No, I understand. 

MR. ABERNETHY: I don't speak for the 
administration, and I don't know what's in their mind, and they 
haven't told me. 

But it's my belief that in going from four years 
to seven years, it allows us to start the engineering and 



11 

environmental work on some programs earlier, and therefore, to 
bring them on board as useful additions to our state 
transportation complex earlier than we otherwise would have 
done. 

It also allows us to have additional choices of 
how to use the monies that we've built up wisely now. I mean, 
we have the task of having a surplus in several accounts. The 
need, I think, to use those funds, but not to rush head-strong, 
foolishly, too rapidly, in their use, but to make choices 
wisely. 

And I believe that increasing the STIP from four 
years to seven years would help us accomplish these goals. 

MR. KELLY: Do you want me to ask a question. 

CHAIRMAN BURTON: Yes, if you don't mind. 

MR. KELLY: One concern that's been expressed 
about that proposal is, the staff level of Caltrans and the 
ability or inability of the Department to deliver additional 
projects that would be forwarded by extending the STIP. 

The LAO has suggested that you would have to 
increase Caltrans staff significantly to meet the new demand. 
And there's fair criticism now that some of the project delivery 
things — some of the projects aren't moving along quickly 
enough now. 

Is there an inconsistency between putting more 
projects in a pipeline that all ready seems crowded, to say the 
least? 

MR. ABERNETHY: Certainly it represents a 
substantial challenge. 



12 

You know, I don't hold a personal opinion, but I 
do know that there is a measure on the ballot that's a 
Constitutional measure that would, if passed, allow an 
alternative to the impact and consider the situation you're 
talking about. 

So, you know, I don't know what the chances of 
that passing or not, nor do I have a personal position on it. 

If it were to pass, it would impact the 
situation that you're talking about, allow it another 
alternative. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 

To the four or seven years, what that indicates 
to me is that you can't finish an project from start to finish 
in less than seven years. So, you have to go to the seven years 
so that you can get the projects in and out, and you maintain a 
certain level of activity within seven years. You bring one on, 
and one has to go out. 

So, it appears when you go from four to seven 
years, we've just extended the time period for doing projects 
within the state. That's kind of ludicrous when I've got a 
Blood Alley, and people look at it and say, "We've got $8 
billion excess, and you can't fix that highway that's killing 
people every week?" 

And I say, "Well, it's on the STIP. It'll be 
done in 2003 or '04," and they say, "Fine." 

I can't tell them that. And that appears to me 
what we're doing here. 



13 

MR. ABERNETHY: Senator, that's not what it 
appears to me that we're doing, because I think when you bring 
up serious highway safety projects and deaths, and corrections 
that need to be done, that need to be done now, and can be done 
in a much shorter period than four years. 

There are a few projects, bigger ones, that 
involve tremendous environmental clearances, that involve very 
substantial engineering loads, and involve very substantial 
federal processes that have to come in series with our work here 
in the state, as opposed to in parallel with them, that do take 
seven years. I think that's what we're getting at. 

And one of the things we're trying to work on is 
trying to see if we can't get some of those federal processes 
lessened, and also to let them run in parallel to our own state 
processes to cut back on the time. 

But you're absolutely right on the questions of 
safety and road repair. They need to be done now, this year, 
accomplished right away. And I don't believe anybody's 
proposing that the kind of things that you and I are concerned 
about here be lengthened in time because of this four to seven 
year deal . 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Move. 

CHAIRMAN BURTON: Have you got family here, Bob. 

MR. ABERNETHY: No. 

CHAIRMAN BURTON: Witnesses in support. 
Witnesses in opposition. 

Call the roll. 



O'Connell . 



14 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 

CHAIRMAN BURTON: Congratulations. 

MR. ABERNETHY: Thank you, Senators. 

CHAIRMAN BURTON: Leave the roll open for Senator 



[Thereafter, SENATOR O'CONNELL 
added his Aye vote, making the 
final vote 5-0 for confirmation.] 

CHAIRMAN BURTON: Next. 

MR. HALLISEY: Good afternoon, Senators. 

SENATOR COSTA: I'm here to support his 
confirmation today. 

CHAIRMAN BURTON: Would you like to comment on 
changing Senator Kopp's policies? 

MR. HALLISEY: On SB 45, I don't, after being 
here ten months, purport to be an expert. 

CHAIRMAN BURTON: I thought Senator Kopp told me 
that you helped draft that. 

MR. HALLISEY: No, that's not correct. Bob 
Wolfe, I think, helped draft it. 



15 

CHAIRMAN BURTON: Didn't you help Bob Wolfe draft 
it? 

MR. HALLISEY: No, I didn't know Bob Wolfe at the 
time. 

I think maybe there should be some modifications 
in it to give the state more flexibility in vital funding needs, 
and probably should be revisited. 

CHAIRMAN BURTON: Why don't you open with a 
statement. 

MR. HALLISEY: I mean, I really don't have any 
statement. I guess either voting for me or against me, you're 
buying into a philosophy of, you know, what you're voting for. 

Over the last 10 to 15 years, we've had an $11 
million — 11 million person increase in population. We're 
probably going to have the same or more over the next 10 to 20 
years, and you've got to be voting for a person who has some 
hope of trying to solve the problem. 

The way I think you solve the problem is a 
combination of a lot of things. We have highway projects. 
We've only built, I think — 20 years ago we had 15,000 miles of 
state highways and interstates. Now we have something like 
15,400. So, there's been very little money spent on road 
construction in the state. 

And it's a little bit disingenuous for people to 
say that highways don't solve problems when they haven't been 
built, and the population and vehicle numbers, and vehicle miles 
have been driven. 

I think you need public transit, especially in 



16 

the urban areas, to solve some of the problems. I think you 
need HOV lanes to a certain extent, if they're rationally 
controlled. 

I agree with Senator Hughes that I'd be very 
skeptical of 24-hour programs. I think they have to be closely 
monitored and responded to if the traffic is unfavorable. 

So, that's sort of my approach, and I don't have 
any, you know, philosophical program that I'm bringing to this. 

I think we're sort of foolish, be Republicans or 
Democrats, to fight about philosophy. We're really just talking 
about moving people and what the best way of doing that is. 

CHAIRMAN BURTON: I think the question Senator 
Hughes raised, I haven't figured it out, either. Some places 
you get two in a car, some places three. I kind of like it when 
you can just be one and shoot right down. 

Then, of course, there's the ongoing problem that 
you may run into when you go back to the Bay Area from here, 
where even against traffic, they've got a Diamond Lane. In 
other words, I think it makes sense to have a Diamond Lane when 
you're going where the traffic is, but — 

MR. HALLISEY: I think that's probably foolish. 

CHAIRMAN BURTON: — you have that whole deal 
right when you get to Pinole that nobody's in, and everybody's 
bumper-to-bumper. I think that was part of a lawsuit with City 
of Berkeley when they did whatever the hell they did down at the 
mud flats. 

Does Caltrans or the Commission have anything to 
do with — for a while it was like, I think, seven in the 



17 

morning until ten at night, or six in the morning until ten at 
night. Now, we've got it, I think, three to seven and something 
else. 

But I still think that it doesn't make any sense 
to have that when there's not a hell of a lot of traffic. 

MR. HALLISEY: I agree completely, and it only 
infuriates people against the possibility of using them. 

CHAIRMAN BURTON: Who's got the authority in 
that? 

MR. HALLISEY: I assume it's Caltrans. 

CHAIRMAN BURTON: Somebody's nodding. We'll get 
to you after. 

They ought to just figure that one out. And I 
know at one time it was a court, there was some kind of deal, 
and we forced them to modify that, and I'd like to force them 
even more, those of us who go back to the Bay Area during that 
time. 

What kind of influence, and this is kind of an 
odd question coming after yesterday's press conference, but what 
kind of influence can the Commission have on the appointing 
authority to encourage the appointing authority to see that 
there are serious problems here? 

And the bandaid approach that I read about in the 
San Jose Mercury today — which is a billion dollars, and maybe 
two billion in bonds, and I doubt if any bonds will make the 
ballot -- you know, to solve what's going to be a hell of a 
problem? 

MR. HALLISEY: Well, I mean, I agree with 



18 

everyone that more money has to be spent on transportation. 
We're near the bottom of the parade among states, and I don't 
believe you can get a new fighter plane for the price of a Piper 
Cub. And I don't think you can get, you know, an educated 
school kid for $3,000 versus $10,000 per student. 

So, we have to spend more money. And how do we 
go about it, whether it's general obligation bonds, GARVEE 
bonds, TIFIA bonds, increasing gasoline tax. 

I mean, I think the Legislature, if they want to 
handle that one, could increase the gasoline tax to solve the 
problem. 

CHAIRMAN BURTON: Well, the Legislature was very 
close to putting something on the ballot until the Governor 
decided that he didn't like it. 

I think with the surplus that we have, and with 
the type of things that some of our Republican colleagues were 
looking for in the Assembly, that we were very, very close to 
being able to put something to the ballot that then got chopped 
out. 

Now, the GARVEE bonds, and I carried the GARVEE 
bond bill, we are limited in GARVEE bonds to a certain 
percentage that would let us front-load. 

The problem with doing it all at once, you get 
Board of Supervisors friendly to Developer A, and they'll spend 
all — they could spend all of the money on two of their 
favorite projects. Within six years from now, there's a new 
project coming, and there's no money because it all got spent 
there, which was actually an issue raised by Chairman Johnston 



19 

in the Appropriation Committee. So, that isn't a way out. 

MR. HALLISEY: There's — general obligation 
bonds are certainly a possibility. 

CHAIRMAN BURTON: Well, what, 50 billion? 

MR. HALLISEY: We can start with six or eight and 
try that for a while and see if that works. 

I mean, there's no question that substantial 
amounts of money have to be spent. In a survey by CTC, it was 
talking 100 billion. The Round Table was talking about another 

15 to 25 billion above what is actually going to be funded as 
needed to be spent. 

You know, something's got to be done. You're 
going to have more people here, and it ain't going to be done 
cheaply. 

CHAIRMAN BURTON: And I had a bond bill that was 

16 billion over four elections — four, four, four, and four — 
which even that, one, I mean, the cost of servicing the bonds 
was a big hit. Selling the bonds would take time. Passage of 
the bonds, the first one, I think this year you could pass 
anything because everybody's happy. If the economy goes in the 
toilet, you couldn't pass anything like that. And it would not 
be able to start moving on the problems. 

The only is solution I see is an SCA type 
solution to let the locals, let the people vote on whether or 
not the locals want to do this. And then my theory about 
government is, if the people don't want it, God bless them; 
don't come writing to me about your stuff. 

But I know that the Commission's been supportive 



20 

of, I think, been more farsighted in this than the appointing 
power. But at some point -- 

MR. HALLISEY: Well, Senator, with respect to the 
sales tax locally, I mean, I don't think with the exception of 
Alameda County, I'm not sure there's really any emergency, in 
that I think the next one is 2005 in San Benito and in Santa 
Clara County. And then it's after, you know, 8, 9 and 10 years. 
So, there's some breathing room to see if we can sell the public 
on both -- 

CHAIRMAN BURTON: You ain't going to sell the 
public when you've got the chief executive saying that the idea 
doesn't make any sense, when really he's got nothing to do with 
it. It's between the Legislature and the people. 

And we also have counties that don't have 
anything cooking that are going to want to do it, and if you get 
up, which I had the great privilege of doing just last Friday in 
the rain, going from Novato to Santa Rosa, which is about 22 
miles in an hour and 10 minutes. Nothing better than that. 

MR. HALLISEY: Right, but those two counties 
that, or at least with respect to Marin in 1962, they withdrew 
from the rapid transit district. They've failed to pass, I 
think even by 50 percent — this is a wealthy county, probably 
the wealthiest in the state, and has not passed it. They're in 
the low 40s on these sales tax measures. 

CHAIRMAN BURTON: Your position is that we 
shouldn't put it before the people or what? 

MR. HALLISEY: Well, no. I think they need to be 
sold. 



21 

CHAIRMAN BURTON: You can't sell people something 
that ain't performed. You put it up -- 

MR. HALLISEY: They don't ~ 

CHAIRMAN BURTON: You put it up on a statewide 
basis. They vote up or down. 

MR. HALLISEY: No, they don't have sales tax 
that's been — 

CHAIRMAN BURTON: We're not talking about only 
the 16 counties. There's 58 counties here, which means — what 
is 16 from 58, Colonel — I think leaves 42. 

MR. HALLISEY: Right. 

CHAIRMAN BURTON: And the thing is, there ain't 
nothing going to happen on bonds; there ain't nothing going to 
be happening on extending the STIP. 

There ain't nothing going to be happening until 
we can convince the appointing power of not the wisdom, but the 
equity in not getting in the way of the people in the 
Legislature, giving them the opportunity to vote on something. 

And my only concern is whether or not — and I 
know the limits that, you know, that a commission has, trying to 
change the mind of the appointing power — but the appointing 
power's going to have to deal with something or the appointing 
power is going to have nothing to deal with. 

MR. HALLISEY: I agree with — 

CHAIRMAN BURTON: And I'm just grateful that the 
two Commissioners here today are personal friends. Would they 
be strangers, you wouldn't even have a hearing. 

[Laughter. ] 



22 

MR. HALLISEY: I agree with your basic position. 

And I would respectfully suggest that, let's wait 
until the plan is developed over the next 30 days, and let's see 
if we can sit down and work out something with respect to bond 

5 funding or bringing a measure before the voters, or what have 

6 you. 

7 CHAIRMAN BURTON: If what I read in the San Jose 

8 Mercury is anything, I mean, that's like putting a bandaid on 

9 somebody suffering from hemophilia. 

10 Senator Knight then Senator Hughes. 

11 SENATOR KNIGHT: I don't have anything. It's 

12 interesting listening. I'm glad that he's a personal friend of 

13 yours. 

14 [Laughter.] 

15 SENATOR HUGHES: Are you going to help your 

16 colleague find the answers to my stupid questions, which I think 

17 are logical questions, on the HOV lanes? 

18 MR. HALLISEY: Yes is the short answer. 

19 SENATOR HUGHES: And also on the big rigs parked 

20 on Caltrans strips that block part of the access road for other 

21 vehicles? I mean, I don't know how that happens. It seems to 

22 me as though you ought to find out the answer just for your own 

23 general knowledge? 

24 MR. HALLISEY: I agree with that. 
2 5 SENATOR HUGHES: Thank you. 

2 6 I move him. 

27 CHAIRMAN BURTON: Did Senator Kopp send a letter 

28 of support? 



23 



MR. HALLISEY: No, he didn't. 

CHAIRMAN BURTON: Witnesses in support. 
Witnesses in opposition. 

Which one are you? 

MR. BAKER: Support, sorry about that, 
Mr. Chairman. 

Steve Baker with Aaron Read and Associates, 
representing the Professional Engineers in California 
Government. 

They've had an opportunity to work with 
Mr. Hallisey on a variety of things, and they've had a good 
experience, and encourage his support. 

Thank you. 

CHAIRMAN BURTON: Any other witnesses? 

Moved by Senator Hughes. Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. 

CHAIRMAN BURTON: We'll hold the roll open. 

Congratulations . 

MR. HALLISEY: Thank you, Senator. 

[Thereafter, SENATOR O'CONNELL 
and SENATOR LEWIS added Aye 
votes, making the final vote 



24 

5-0 for confirmation.] 

CHAIRMAN BURTON: Sean Harrigan. 

It's my great pleasure to introduce my friend, 
Sean Harrigan, whose appointment to the PERS Board — 

MR. HARRIGAN: State Personnel Board. I'm on the 
PERS Board. 

CHAIRMAN BURTON: You've got two of them. 

MR. HARRIGAN: Well, there's one person from the 
State Personnel Board that's on PERS. 

CHAIRMAN BURTON: I stand by my statement. 

He is a good friend of mine. 

Go ahead, Sean. 

MR. HARRIGAN: I'm not going to be long. 

First of all, it is a pleasure to be here today, 
and to be before this respected group. 

Just a little bit about my background. I'm not 
going to go through the whole thing. I just want to briefly 
touch on my experience in labor management relations. 

I have been a representative of employees for 27 
years in a number of capacities. Was a business agent, 
organizer for a local, president of a local, assistant director 
in a region, director of a region, assistant director to the 
international director of organizing. 

I've dealt with literally thousands of grievances 
and disputes involving employees and employers. I've been 
involved in the collective bargaining process for 24 of my 27 
years . 

I have a thorough understanding of labor 



25 



management relations, and I am pleased to be serving on the 
State Personnel Board. 

CHAIRMAN BURTON: Senator Knight. Senator 



Hughes. 



SENATOR HUGHES: No questions. 

No objections, move the nomination. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Family? Support? 

MR. RANKIN: Tom Rankin, California Labor 



Federation. 



Sean has a lot of experience to bring to the 
State Personnel Board and also to the PERS Board in terms of 
his experience with pension investments. 

I think it's — he'll bring balance to the State 
Personnel Board. The last labor person I remember on the 
Personnel Board — John probably knew him — was Bob Ash from 
the Alameda Labor Council, I think, back in the 1960s. 

CHAIRMAN BURTON: God rest his soul. 

Aaron . 

MR. READ: Thank you, Mr. Chairman and Members. 
Aaron Read representing the CHP Association, CDF Firefighters, 
Professional Engineers in California Government. 

We are very delighted to support Sean Harrigan 
for both the SPB and I know he's the new member on the PERS 
Board. 

He brings a lot of enthusiasm, interest, and 
knowledge that has been lacking. We're very excited to support 
him. 



Lewis . 



26 

CHAIRMAN BURTON: Witnesses in opposition? 

Hearing none, call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 

CHAIRMAN BURTON: Leave the roll open for Senator 

Congratulations, Sean. 

MR. HARRIGAN: Thank you. 

[Thereafter, SENATOR LEWIS 
added his Aye vote, making the 
final vote 5-0 for confirmation.] 

[Thereupon this portion of the 

Senate Rules Committee hearing was 

terminated at approximately 2:21 P.M.] 
— ooOoo — 



27 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 
cQ day of '1/V}<!U^X^ 2000. 




390-R 

Additional copies of this publication may be purchased for $3.00 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publication's 

1 020 N Street, Room B-53 

Sacramento, CA 95814 

(916)327-2155 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 390-R when ordering. 



3 " 



DOCUMENTS DEPT. 



^HEARING 

.SENATERULES COMMITTEE 

STATE OF CALIFORNIA 



APR I 9 2038 

SAN FRANCISCO 
PUBLIC LIBRARY 




STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MARCH 15, 2000 
1:30 P.M. 



391-1 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



WEDNESDAY, MARCH 15, 2 000 
1:30 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

SENATOR JACK O'CONNELL 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

ALSO PRESENT 

DORENE D'ADAMO, Member 
Air Resources Board 

SENATOR DICK MONTE I TH 

ASSEMBLYMAN DENNIS CARDOZA 

SENATOR JIM COSTA 

SANDRA SPELLISCY 

Planning and Conservation League 

BILL PAULI 

California Farm Bureau 



Ill 



MANUEL CUNHA, President 
Nisei Farmers League 

ED MANNING 

Western States Petroleum Association 

MARY-ANN WARMERDAM 

California Farm Bureau Federation 

MICHAEL S. BERNICK, Director 
Department of Employment Development 

PATRICK JOHNSTON 

JIM HARD, Director 
Civil Service Division 
CSEA 

TOM RANKIN 

California Labor Federation 

CHUCK CENTER 

California Council of Laborers 

SCOTT HAUPE, Vice President 

Small Business Network in San Francisco 

DON HARPER 

California Association of Veteran Service Agencies 

VIRGINIA HAMILTON 

California Workforce Association 

ALLEN DAVENPORT 

Service Employees International Union 

ROY GABRIEL 

California Farm Bureau Federation 

ART NALDOZA 

La Cooperativa Campesina de California 

FRANK RAMIREZ 
American GI Forum 



IV 



DAVID VILLARINO, National Director 
Collective Bargaining 
United Farm Workers, AFL-CIO 

JOHN MOLINA, President 
Union Label, Sacramento 

HOWARD OWENS 

Congress of California Seniors 

Consumer Federation of California 

MIKE CURRAN, Executive Director 
NOVA Private Industry Council, Silicon Valley- 
Mi GUEL NAVARRETTE 
Cafe de California 

MATTHEW R. McKINNON, Member 
Air Resources Board 

BARRY BROAD 

Teamsters and Amalgamated Transit Union 

ART CARTER 

California Pipe Trades Council 

State Association of Electrical Workers 

Western States Sheetmetal Workers Union 

WILLIE PELOTE 

American Federation of State, County and Municipal Employees 

BILL CAMP 

Sacramento Central Labor Council 

FELICE PACE 

Klamath Forest Alliance 

ROBERT PERNELL, Member 

State Energy Resources Conservation and Development Commission 

SENATOR STEVE PEACE 

JAN SHORI, General Manager 
Sacramento Municipal Utility District 

JOE WINSTEAD 

California State Pipe Trades Council 



EDDIE BERNACCHI 

National Electrical Contractors Association 
California Legislative Conference of the Plumbing, 
Heating and Piping Industry 

ROBERT CLINE 

Electric and Gas Industries Association 

KAREN EDSON 

Independent Energy Producers Association 

HOWARD POSNER 

SMUD Board of Directors 

STEVE BAKER 

California Association of Professional Scientists 

CRAIG JONES 

Small Business Owner 

LINDA DAVIS 

SMUD Board of Directors 

WARREN MENDEL 

Southern California Contractors Association 

JOHN WHITE 

Sierra Club 

Clean Power Campaign 

TIM' CREMINS 
Operating Engineers 



VI 

INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

DORENE D'ADAMO, Member 

State Air Resources Board 1 

Introduction and Support by 

SENATOR DICK MONTEITH 1 

Background and Experience 1 

Questions by CHAIRMAN BURTON re: 

Current Status of MTBE Phase Out 4 

Environmental Justice 5 

Efforts of Board regarding MTBE in 

Lakes and Reservoirs 6 

Ability to Shift "Hats" on Air Board and 

CALFED Issues 6 

Questions by SENATOR LEWIS re: 

Response to LAO's Criticism of ARB's 

Bus Replacement Program 7 

Retrofitting Versus Replacement of Buses 8 

Questions by SENATOR HUGHES re: 

Sufficiency of $50 Million in Governor's 

Budget to Cover ARB's Urban Bus Fleet 

Regulation 9 

Plans to Address Environmental Justice 

Issue 9 

Statement in Support by 

ASSEMBLYMAN DENNIS CARDOZA 10 



Vll 



Statement in Support by 

SENATOR JIM COSTA 11 

Motion to Confirm 12 

Witnesses in Support: 

SANDRA SPELLISCY 

Planning and Conservation League 12 

BILL PAUL I 

California Farm Bureau 13 

MANUEL CUNHA, President 

Nisei Farmers League 13 

ED MANNING 

Western States Petroleum Association 13 

MARY-ANN WARMERDAM 

California Farm Bureau Federation 14 

Committee Action 14 

MICHAEL S. BERNICK, Director 

Department of Employment Development 14 

Background and Experience 14 

Introduction and Support by 

SENATOR PATRICK JOHNSTON 15 

Resumption of Background and Experience 16 

Questions by CHAIRMAN BURTON re: 

Reason for Establishing Disability 

Rate that Would Have Made System 

Insolvent 17 

Delinquent DI Fund Forecasts 

Submitted to Legislature 19 

Addressing Concerns of Voluntary 

Plan Employers Who Dropped Out 2 



Vlll 



Number of Voluntary Plans that Dropped 

Out with Low Rate at Beginning of Year 21 

Position on Kuehl Bill to Extend SDI to 

State Employees 22 

Telephone Filing for Delivering UI 

Services 22 

Governor's Proposal to Earmark Welfare to 

Work Funds and Federal Funds to 

Recruitment and Retention Training of 

Workers in Nursing Homes and for IHSS 24 

Questions by SENATOR HUGHES re: 

What Department Is Doing to Help High 

School Students Enter Employment 25 

Motion to Confirm 27 

Questions by SENATOR KNIGHT re: 

Setting of DI Rates 27 

Statutory Formula Used to Set Rate 27 

Witnesses in Support: 

JIM HARD, Director 

Civil Service Division 

CSEA 2 8 

TOM RANKIN 

California Labor Federation, AFL-CIO 29 

CHUCK CENTER 

California State Council of Laborers 3 

SCOTT HAUPE, Vice President 

Small Business Network, San Francisco 3 

DON HARPER, President 

California Association of Veteran 

Service Agencies 31 



IX 



VIRGINIA HAMILTON 

California Workforce Association 31 

ALLEN DAVENPORT 

Service Employees International Union 32 

MANUEL CUNHA, President 

Nisei Farmers League 32 

ROY GABRIEL 

California Farm Bureau Federation 32 

ART NALDOZA 

La Cooperativa 32 

FRANK RAMIREZ 

American GI Forum 32 

DAVID VILLARINO, National Director 

Collective Bargaining 

United Farm Workers 32 

JOHN MOLINA, President 

Union Label , Sacramento 32 

HOWARD OWENS 

Congress of California Seniors 32 

MIKE CURRAN, Executive Director 

NOVA Private Industry Council, Silicon Valley 32 

MIGUEL NAVARRETTE 

Cafe de California 32 

Committee Action 33 

MATTHEW R. McKINNON, Member 

State Air Resources Board 33 

Introduction and Support by 

SENATOR JACK ' CONNELL 33 

Background and Experience 34 



Questions by SENATOR LEWIS re: 

Number of Buses That Could Be Retrofitted 

Under Governor' s Proposal 3 6 

CNG as Alternative 37 

Questions by CHAIRMAN BURTON re: 

Governor's Proposed $50 Million: Loans, 

Shared Costs , or Grants 37 

Why Diesel Is Popular in Trucking 38 

Statements by SENATOR O'CONNELL re: 

Grant Program to Air Districts 39 

Witnesses in Support: 

TOM RANKIN 

California Labor Federation, AFL-CIO 40 

BARRY BROAD 

Teamsters and 

Amalgamated Transit Union 40 

HOWARD OWENS 

Consumer Federation of California 40 

ART CARTER 

California Pipe Trades Council 

State Association of Electrical Workers 

Western States Sheetmetal Workers Union 40 

CHUCK CENTER 

Laborers Union 40 

ED MANNING 

Western States Petroleum Association 40 

WLLIE PELOTE 

American Federation of State, County and 

Municipal Employees 40 



XI 



ALLEN DAVENPORT 

Service Employees International Union 40 

SANDRA SPELLISCY 

Planning and Conservation League 40 

BILL CAMP 

Sacramento Central Labor Council 40 

Motion to Confirm 40 

Witness in Opposition: 

FELICE PACE 

Klamath Forest Alliance 41 

Response by MR. McKINNON 43 

Questions by SENATOR KNIGHT re: 

Definition of Buffer Zones 44 

Committee Action 45 

ROBERT PERNELL, Member 

State Energy Resources Conservation and 

Development Commission 45 

Introduction and Support by 

SENATOR STEVE PEACE 45 

Background and Experience 46 

Questions by SENATOR LEWIS re: 

Qualifications to Serve in Environmental 
Protection Slot on Commission 49 

Motion to Confirm 50 

Witnesses in Support: 

CHUCK CENTER 

Laborers Union 50 

JAN SHORI, General Manager 

Sacramento Municipal Utility District 50 



Xll 



TOM RANKIN 

California Labor Federation 50 

TOM MOLINA, President 

Union Label , Sacramento 51 

JOE WINSTEAD 

California State Pipe Trades Council 51 

EDDIE BERNACCHI 

National Electrical Contractors Association 

California Legislative Conference of the 

Plumbing, Heating and Piping Industry 51 

MANUEL ALVAREZ 

Southern California Edison 51 

ART CARTER 

State Association of Electrical Workers 

Sheetmetal Workers Union 51 

BOB CLINE 

Electric and Gas Industries Association 51 

KAREN EDSON 

Independent Energy Producers Association 51 

WILLIE PELOTE 

American Federation of State, County and 

Municipal Employees 51 

HOWARD POSNER, Board of Directors 

Sacramento Municipal Utility District 51 

STEVE BAKER 

California Association of Professional 

Scientists 51 

CRAIG JONES 

Small Business Owner 51 

LINDA DAVIS, Board of Directors 

Sacramento Municipal Utility District 51 

WARREN MENDEL 

Southern California Contractors Association 51 



Xlll 



HOWARD OWENS 

Congress of California Seniors 51 

JOHN WHITE 

Sierra Club 

Clean Power Campaign 51 

TIM CREMINS 

Operating Engineers 51 

Committee Action 53 

Termination of Proceedings 53 

Certificate of Reporter 54 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: Senator Monteith. 

SENATOR MONTEITH: Chairman Burton and Members, 
I've known Dee Dee for 15 years, and I've worked with her on a 
variety of air quality issues facing the San Joaquin Valley. 
Some of those issues have been the impact of growth on air 
quality, and other issues have been mobile source issues. 

Since being appointed to the Air Board last 
August, Dee Dee has helped to craft creative solutions to 
complex issues including the MTBE phase in. 

CHAIRMAN BURTON: Phase in or phase out? 

SENATOR MONTEITH: Phase out. 

Actually, Dee Dee and I have not always agreed, 
but she has always been very fair, always listened, and I am in 
full support of her appointment. 

Thank you. 

MS. D'ADAMO: Thank you, Senator Monteith. 

Mr. Chairman, Members, Senator Costa had 
expressed an interest in being here today as well. It looks 
like he's running a few minutes behind schedule. With your 
permission, I'll continue. 

Thank you very much for the opportunity to appear 
before the Senate Rules Committee. I am honored and privileged 
that the Governor appointed me to serve as the legal 
representative on the Air Resources Board. I'm proud to be 
associated with a body that's highly regarded throughout this 
nation for being a leader in the effort of air quality. 



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I've been serving on the Board since last August 
and already have had the opportunity to participate in several 
significant Board decisions. One of the first actions to come 
before me as a new member of the Board was the phase out of MTBE 
in gasoline. I am pleased that the Board's action implemented 
the Governor's Executive Order and the direction of the 
Legislature, while at the same time preserving the air quality 
benefits of reformulated gasoline. 

I'm also pleased to have played a role in the 
consensus of the Board's action last month that will cut 
emissions from the state's urban bus fleet. I believe that both 
of those actions reflect a balanced consensus and an approach 
that best achieves our state's clean air goals. 

By way of personal background, I am a native 
Californian, raised in Napa. I earned my Bachelor's Degree at 
the University of California at Davis, and I received my law 
degree from the University of the Pacific, McGeorge School of 
Law. 

I served as legislative staff as well as 
committee staff for the Joint Committee on Prison Construction 
and Operations. 

After being admitted to the State Bar, I served 
as legal counsel to the Assembly Committee on Public Safety 
until 1987, when I was appointed Assistant Director to the 
California Youth Authority. 

In 1989, I joined Congressman Condit's 
Washington, D.C. staff as Legislative Director, then returned to 
California to practice law in the private sector in 1991. 



My current position as legal counsel for 
Congressman Condit, as well as my previous work for the Western 
Ancient Forests Campaign, and environmental policy land use 
instructor at California State University at Stanislaus, has 
enabled me to pursue my environmental interests professionally. 

Through these positions I have had the 
opportunity to work in depth on a wide range of agricultural and 
environmental issues, including air quality issues, and have 
come to the conclusion that the achievement of our state's air 
quality goals can best be achieved with the development of 
programs that encourage compliance from the regulated community. 

I believe that the swiftest progress toward these 
goals begins with fairness in the regulatory process, first of 
all by ensuring full public participation in the development of 
the Board's programs, and secondly, by clearly identifying the 
steps that industry will need to take. 

As the attorney representative to the Air 
Resources Board, I believe that it is my duty to ensure all 
participants are provided with due process and fairness in the 
regulatory process. I believe that meeting the standard can 
best help to foster an environment in which consensus among 
affected industry stakeholders and environmental interests can 
emerge, as was I believe to be the case with the MTBE phase out 
and the urban bus fleet regulation. 

On a more personal note, I would like to add that 
as a mother of three small children that are here with me today, 
who are being raised in the San Joaquin Valley, an area which, 
unfortunately, ranks as one of the most polluted air quality 



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regions in the nation, I am extremely passionate about the need 
to protect and enhance California's public health, particularly 
amongst the most vulnerable populations of our society, 
children, the elderly, and those with health risks. 

I consider service on the Air Resources Board to 
be a great responsibility as well as a tremendous opportunity to 
make a true and meaningful contribution to achieving clean air 
for all Calif ornians . I look forward to continuing to work with 
with the administration and the Legislature on this shared goal. 

Once again, Mr. Chairman, Members, thank you for 
the opportunity to appear before you today, and I would be happy 
to respond to any questions that you may have. 

CHAIRMAN BURTON: Where are we with the MTBE 
deal? I'm not sure about this. I know that the Legislature was 
moving toward either and abolition or a quick phase out. Then 
the Governor slowed down the phase out. 

What happened? 

MS. D'ADAMO: Actually, I believe that what 
occurred was that the Legislature adopted legislation that 
required a phase out, and the Governor initially, upon taking 
office, issued an Executive Order that was similar. 

And the real challenge that was before the Air 
Board was to phase out MTBE while, at the same time, maintaining 
the air quality benefits of MTBE. It had good air quality 
benefits. 

So, that phase out has been adopted, consistent 
with the direction of the Legislature and the Executive Order. 
And at this point, the focus seems to be to obtain a waiver in 



Congress for the oxygenate requirement that is required under 
the Federal Clean Air Act. 

CHAIRMAN BURTON: There wasn't some kind of 
pull-back? 

MS. D'ADAMO: No, no. 

CHAIRMAN BURTON: Will can you comment just 
briefly on the, quote, "environmental justice" issue? What do 
you think the air boards in general should do to address that? 

MS. D'ADAMO: Certainly, Senator. 

Environmental justice is an issue that is of 
great concern to me personally because, as a mother of, as I 
said,- three small children, I have a tremendous empathy for 
those who want to not be forced to leave their communities, but 
to improve the conditions of their community in terms of 
environmental quality. 

I think that the Air Board is on the right 
track. What we need to do is get a better grapple of the 
situation, particularly in communities that seem to be faced 
with cumulative impacts from multiple sources. 

Once we get a better handle on the data, in fact, 
there are several areas throughout the state that are currently 
undergoing monitoring studies, then I think that'll put us in a 
better position to make determinations as to how to deal with 
this very important issue. 

CHAIRMAN BURTON: What are the air boards doing? 
The MTBE problem, a lot of it in the water with the jet skis and 
personal water craft, and, I guess, two-stroke engines or 
something, but what efforts or actions should or has the Board 



taken to try to deal with this, especially in the lakes and 
reservoirs? 

MS. D'ADAMO: Right. 

With regard to the two-stroke engines, I believe 
that the Air Board adopted a regulation on that prior to me 
joining the Air Board. Two-stroke engines are not — were not 
outlawed, but instead, a regulation was adopted that would 
provide for cleaner burning engines. 

And it's my understanding, as something that 
occurs in many different sectors "of technology, the engine 
manufacturers appear to be in line to meet that deadline, and in 
fact, quite a few are putting equipment on line that meets that 
standard prior to the mandated time frame. 

CHAIRMAN BURTON: How are you going to wear the 
Air Board hat and Gary Condit's Central Valley water hat, and 
the CALFED things? In one instance, you're kind of involved, 
although it's this regional air board, but with a state 
responsibility. But when you're dealing on your role as 
basically representative on the CALFED thing, does that ever 
give you headaches? Do you have trouble changing hats on 
occasion to be more of a statewide? 

You're looking for the Valley's interest on one 
instance, and the state's on the other. And God forbid you 
could confuse the two. 

MS. D'ADAMO: I think, first of all, it's helpful 
that they are different issues. With this not being a water 
board, that helps in that regard. 

As the legal representative, I am not 



representing the Central Valley, although I bring the concerns 
of the Central Valley with regard to air quality issues with me 
when I make Board decisions. But I am representing the state as 
a whole on air quality issues. And our number one mandate is to 
protect the public health. That not only is something I view as 
my duty, but something I feel strongly about. 

Sometimes I am going to have to shift gears and 
wear my other hat, as you indicated. I need to make it clear 
when I am in one arena, if I have dealt with individuals on, say 
for example, if I'm working for the Congressman on air issues, 
and I happen to be engaging in conversations with individuals 
that I have will also dealt with on air quality issues, I need 
to make it clear that I am representing the Congressman. And 
that is something I've been doing since being appointed in 
August. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: There's $50 million in the 
Governor's budget for the older bus replacement program. 

The LAO, apparently, has been somewhat critical 
of the administration, saying that it's lacking in terms of 
goals or criteria, and whether or not there should be a focus on 
replacement of the buses, or just retrofitting, and also whether 
or not there should be a requirement for local government match. 

What kind of response does the ARB have right now 
to the LAO report? 

MS. D'ADAMO: Well, I know that our staff has 
been working with Budget staff in Legislature on this issue. 

My main concern on this issue is, first of all, I 



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am really pleased to see the $50 million being proposed by the 
Governor on this issue. 

When the urban bus fleet regulation was before us 
a couple of months ago, we did receive quite a bit of what I 
would consider to be compelling testimony of the need to address 
the most vulnerable segment of our society, or one of the most, 
and that's children that are exposed to the particulate matter 
from diesel exhaust. 

As much as they made that compelling argument, 
however, it was difficult to include that issue in the 
regulation because of the high cost, which is the number one 
issue that stands in the way of converting over. 

So, I'm pleased to see that the Governor has made 
this proposal. I fully support it, and it's my hope that we can 
try and structure those funds in such a way that we can convert 
over as many buses in the quickest amount of time possible. And 
I know that our staff is committed to working with the 
Legislature and the administration on that goal. 

SENATOR LEWIS: How do the numbers work out in 
terms of comparison of retrofitting versus just bus replacement? 

MS. D'ADAMO: I believe that bus replacement for 
compressed natural gas would be in the neighborhood of 300 
buses. I may be off. 

But retrofit, if we were to do solely retrofit 
and not compressed natural gas, would be more in the 
neighborhood, I believe of somewhere between 8-10,000 buses. 
Perhaps there 'd be a combination and criteria that would laid 
out, so that in some instances there would be purchases of new 






buses, as opposed to others that would be, you know, a little 
bit more compelling for straight retrofit. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: The bus question. 

L.A. County alone could absorb the 50 million. 
Do you think that that's enough money, because the poor public 
transportation that we have, because of the number of old cars 
that we have in the poorer communities, that people need to use 
to get their children to school? 

How do you think the 50 million is going to go? 
And is it going to be anywhere near sufficient? If you had to 
advise the Governor, what would you ask him, and advise the 
Legislature, because we are here now? Do you think that's 
enough money? 

MS. D'ADAMO: Senator, I would, first off, 
compliment the Governor for recognizing that this is a crucial 
issue and say, good job on a first — first step. We need to, 
obviously, go much further than this, and I'm hoping that this 
is the beginning of many appropriations to come in this area. 

Because I agree with you, 50 million, although if 
we went with retrofit, it would go quite a ways, but there are 
going to be situations that would call for, perhaps, another 
approach. And there's going to be a greater need, I agree. 

SENATOR HUGHES: As a member of the Air Resources 
Board, how do you plan to address the environmental justice 
issue? 

MS. D'ADAMO: Yes, Senator. As I indicated 
earlier — 



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SENATOR HUGHES: I just want you to repeat it so 
I'm sure that I heard it right. 

MS. D'ADAMO: Sure. 

I believe that the Air Board is on the right 
approach, and that is, there are several monitoring projects 
that are you under way. We need to get a better grapple on this 
issue in terms of the scientific data that's out there. 

My gut feeling is that there — and you would 
know better than I would, representing these areas — there are 
communities that are impacted in a tremendous way as a result of 
not just one pollution source/ but the cumulative impact. 
Something definitely needs to be done about it. 

I think that we're going to be better position to 
be able to respond if we can have that data. 

The data will also produce, I'm hoping, another 
result, and that is that industry, regulated industry, that may 
not be regulated to the extent that would resolve the problem in 
a given community, once that information is available to the 
public, I think that it's going to help them, put them in a 
better position to come up to the plate and respond to the 
issues that affect certain communities. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Before we have any more 
questions, I see Assemblyman Cardoza and Senator Costa, who I 
think briefly would like to announce their support and get about 
their business. 

ASSEMBLYMAN CARDOZA: Thank you very much, 
Senator. It's truly a pleasure to be here to testify on behalf 



11 

of Dee Dee Moosikian. 

We started off as staff people together several 
years ago. And I've got to tell you that she was much more 
talented than I was. I'm glad to see that she's getting 
recognized. 

She's effective in everything she's attempted, 
including being a wonderful parent. I very much respect her and 
encourage her confirmation. 

CHAIRMAN BURTON: Thank you. 

Senator. 

SENATOR COSTA: Thank you very much, Members of 
the Senate Rules Committee. 

I've worked with Dee Dee for a number of years on 
a host of issues. And I think what we look for in appointments 
in important boards and commissions in California are people 
that are forthright, people that do their homework, and people 
that are problem solvers. I think this individual brings all of 
those capabilities to this Air Resources Board. 

And her ability to balance a host of diverse 
responsibilities has been proven in the past, and I see no 
reason why she won't be very capable in doing that in the 
future . 

I wholeheartedly support her confirmation. 

CHAIRMAN BURTON: Thank you, Senator. 

Senator Knight, do you have any questions? 

SENATOR KNIGHT: I do not have any questions. 

CHAIRMAN BURTON: Senator O'Connell. 

SENATOR O'CONNELL: Would you like a motion? 



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I'll make a motion. 

CHAIRMAN BURTON: Your family, you said, was 
here? 

MS. D'ADAMO: Yes, Senator. 

Before introducing them, though, I would like to 
thank Senator Costa, Senator Monteith, and Assemblyman Cardoza. 
I have a very high level of respect and admiration for all three 
of you, and I thank you very much for being here with me today. 

I'd like to introduce my family, if I may. My 
husband, Berge Moosikian; my parents, Joe and Iris D'Adamo. 

And I've got my three children there in the back, 
too: Audriana, Marissa, and Ara. They're outside. The reason 
they're outside is, I have a two-year-old, and he'd be quite 
disruptive. 

And then I'm really honored to have my 
grandmother here with me today, and it's her birthday, Julia 
Santis, and there -she is. 

CHAIRMAN BURTON: Well, you make it easy, don't 
you. We'd probably better confirm, huh? 

Senator Lewis was waiting for one more compliment 
to the Governor though. 

[Laughter. ] 

CHAIRMAN BURTON: Witnesses in support, briefly. 
It's grandma's birthday; we're going to do it. Name and 
organization. 

MS. SPELLISCY: Mr. Chairman and Members, Sandra 
Spelliscy with the Planning and Conservation League. 

Very pleased to support the appointment. We've 



13 

worked with Ms. D'Adamo in the past year, and we're looking 
forward to a continued relationship with her. 

Thank you. 

MR. PAUL I : Good afternoon, Senator. Bill 
Pauli, Farm Bureau. 

On behalf of our members and many others up and 
down the great State of California, we certainly are here to 
support her confirmation. She's bright, articulate, and will do 
a tremendous job for the State of California. 

Thank you, Senators. 

MR. CUNHA: Senators, Chairman, Manuel Cunha, 
President of the Nisei Farmers League, also a member of the 
United States Department of Agriculture, USDA Air Quality Task 
Force. 

We've had a great opportunity in agriculture, 
working with Dee Dee over the past years. And we give her our 
total support as well as other ag. groups in the San Joaquin 
Valley and those down in Imperial Valley as well. 

She's done an outstanding job, and wearing both 
hats, Senator, she has done a great job in moving both of those 
things . 

But again, we give her our total support. Thank 
you, Dee Dee. 

CHAIRMAN BURTON: We'll tip at least one of the 
hats . 

MR. MANNING: Ed Manning on behalf of the 
Western States Petroleum Association. 

We work closely with Ms. D'Adamo and others, and 



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she's shown great leadership already on the Board. We look 
forward to working with her in the future. 

MS. WARMERDAM: Mr. Chairman, Members, my name is 
Mary-Ann Warmerdam. I'm with the California Farm Bureau 
Federation. 

We've enjoyed our working relationship, and we'd 
encourage you to vote aye on her confirmation. 

CHAIRMAN BURTON: Any witnesses in opposition? 

Moved by Senator O'Connell, call the roll. 



SECRETARY WEBB 
SENATOR HUGHES 
SECRETARY WEBB 
SENATOR KNIGHT 
SECRETARY WEBB 



Senator Hughes. 

Aye. 

Hughes Aye. Senator Knight. 

Aye. 

Knight Aye. Senator O'Connell. 
SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 
SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 
CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 
CHAIRMAN BURTON: Congratulations, Dee Dee. 
MS. D'ADAMO: Thank you very much. 
CHAIRMAN BURTON: Director of the Employment 
Development Department, Michael Bernick. 

MR. BERNICK: Mr. Chairman, Fran Burton says to 
keep it under 90 seconds, and I'm going to. 

I think I've set out a number of the goals and 
objectives in this piece. I would just say that I've been 



15 

involved in job training for over 20 years. I ran a job 
training group in the late '70s through the mid-80s. Since the 
mid-80s, I've been a volunteer board member of more than a dozen 
of our job training groups in the Bay Area. 

So, if there's one thing I think I bring, it's a 
sense how job training, and how our programs work on a very 
local level, on a community based organization level. 

When I talked to the Governor after the election, 
this was the only job I talked to him about. EDD is a great 
department . 

CHAIRMAN BURTON: Senator Johnston. 

SENATOR JOHNSTON: Mr. Chairman and Members, 
I've worked with Mr. Bernick since his appointment. I've found 
him quite solicitous of legislative input and very committed to 
the role that the Legislature must play in constructing a 
workforce investment system that serves the range of citizens of 
California in need of such services. 

Obviously, the Employment Development Department 
has a lot of other responsibilities, and in those, the 
Department is well served by many of the staff who've been there 
a long time. 

But the leadership that we now have, I think, 
will give new emphasis to this effort that we must all engage in 
to make sure that people can be trained for jobs, whether 
they're leaving welfare, or whether they're at the other end of 
the scale and have good skills but need other skills in order to 
succeed in this economy. 

So, I would recommend Mr. Bernick highly to you 



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for confirmation, and I think that he represents the best of 
this administration in terms of recognizing the relationship 
between the Legislature and the administration in sharing the 
responsibilities, particularly in these areas of employment. 

Thank you. 

CHAIRMAN BURTON: Thank you, Senator. 

Go ahead. 

MR. BERNICK: To wrap up, I appreciate that, 
Senator. 

I was saying that is the one job that I talked or 
spoke to the Governor about after the election because it is a 
department that's great in a number of ways and, I think, has a 
lot of resources to approach some of the issues that you've been 
working on for many, many years. In part it's great because of 
its size; in part it's great because people have come to us 
because of their interest in employment. 

It's a department with a great sense of mission 
as well as sense of history. And among ourselves, our 12,000 
employees, we disagree on issues, and there's still a lot of 
issues we have to work out internally, and we are. But I think 
people are bonded by that department, or come to us because of 
their belief that work is dignity, that employment is central, 
and there's a lot we can do. 

Indeed, having been involved for many years, this 
is such an amazing time, an amazing time we have. Unemployment 
statewide is 4.6 percent. But even more so, unemployment in 
virtually all the urban areas is below 3 percent, with the 
exception of L.A. County, which is 5.6 percent, but we have 






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opportunity now, especially in our urban areas, to attack a lot 
of the long-term issues. 

As I tried to lay out here, California workers 
with disabilities, how to gets them into the labor market, 
Welfare to Work, especially the skills upgrading, 
apprenticeships in the so-called working poor, we have a lot of 
opportunities now that we've never had. We have a rare window. 

We also have a rare window, I think, to do some 
things in terms of the ag. workforce. 

I know you may want to ask questions. I'd only 
also point out, even though job training is a main part of the 
department, the great bulk of our workforce is in tax, UI, DI . 
These are exciting areas, important areas, we're looking at ways 
both of, in terms of improving services, through the Governor's 
whole initiative on e-government, through anti-fraud, through a 
number of measures. 

I know you mainly want to ask questions. 

CHAIRMAN BURTON: Can you explain the foul-up on 
establishing the disability rate at the beginning of the year 
that was established at a number that would have made it 
insolvent? Then it took, I think, in my judgment, action or 
efforts by the Legislature as well as labor organizations to get 
it reviewed. 

Where did the direction come to come up with an 
artificially low number? 

MR. BERNICK: Well, you know, under statute, the 
EDD Director sets the rate. So, and we set it at one point in 
the year. 



18 

So, there was great interest on the part of the 
department as well as the administration. 

CHAIRMAN BURTON: It was clearly an inadequate 
thing. Was the direction a mistake? 

MR. BERNICK: I think the general thing was that, 
you know, can we do anything to prevent raising of a rate which 
involves taking more money out of people's pay checks. So, you 
know, we have made projections in the past. Some have been 
accurate; some have not been accurate. 

So we decided, let's see as long as we can to 
make sure that we really have to raise the rate. This fund is 
going to become at least insolvent or close to insolvent. So, 
we waited until February, when it then became clear that if we 
didn't raise the rate — 

CHAIRMAN BURTON: I think you waited until 
February until the heat got too hot, in my opinion. 

MR. BERNICK: No, I think what is fair to say is 
that there was a big push to do everything possible not to raise 
any rate that would take — because raising the rate basically 
means we're taking — 

CHAIRMAN BURTON: We know what it does, but we 
know what the law requires. The law requires the rate to 
reflect enough coming in so that the system is not insolvent. 
That's what the law requires, as I understand it. 

And the tremendous number of people employed 
meant more people, conceivably, eligible for DI, which meant 
more money going out, and you had to have -- 

MR. BERNICK: Also more money coming in. 



19 

CHAIRMAN BURTON: Right, but you had the rate, 
you know, it seemed to me that the cards would have said, you 
have to raise the rate up to keep it there. 

It was kept down. Then the Legislature, I think 
there was letters sent by the leadership. I think Senator Solis 
and Johnston, and I don't know who on the other side, and then 
it went up. 

I don't want to have to do that every time the 
law requires something to be done, not just by you, Michael. We 
find it with a ton of agencies. " So, you know, it happened. 

Hopefully, the next time, they'll do it according 
to the law, and not according to some political dictates. 

The department, and I don't know if this is your 
responsibility or the people before, but you're required to 
submit a DI Fund forecast to us in May and October. And the 
most recent one we have received was October, '98, dated 
December 28th, and there were no forecasts in the year of '99. 

Was that oversight? What was that one? 

MR. BERNICK: No, no. We had, you know, you're 
right. By statute, there is a certain process set out. 

We had our forecast, as you point out. It's such 
an extraordinary economy. You have far more people in the labor 
force . 

But you're right. Gives more people at risk of 
taking use of it, but puts far more money into the fund. 

CHAIRMAN BURTON: The law requires these reports. 
Why weren't they given to us? 

MR. BERNICK: I believe they were given. 



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CHAIRMAN BURTON: Well, I believe they weren't. 

MR. BERNICK: With our forecast. 

CHAIRMAN BURTON: Again, you're not the only 
department. Speaker Designate Hertzberg had the Fish and Game 
Committee before him, because we put these reports in the law 
for some reason, and then everybody ignores them. 

I would just hope that you do your best to get 
them to send us reports. 

I think the other thing is, if you can't, or it's 
too much trouble, then during the budget hearings on your 
budget, you just say, you know, "You require us to do this, and 
it makes more sense to change the timeframe and only do one, 
give some leeway," and I think that'd be fine. I mean, nobody 
wants to make you do something that you can't do. 

But if you can't do it, or we tell you to do 
something stupid, which is not beyond the realm, that you tell 
us that, you know, like, it's better if we do it this way and 
once a year, or whatever. 

Now, just a couple questions. The voluntary plan 
employers who set the rates no higher than those set by EDD, 
they dropped their plans when the contribution rate was set at 
the erroneous 5 percent. Now that it's increased to 7, how are 
you going to address the concerns of these employers who dropped 
out but may want to get back in at the 7 rate? 

MR. BERNICK: As soon as we increased the rate, 
literally the same day, we started the process to contact the 
voluntary plans who had dropped out. And also to set up the 
most simple and expeditious process for them to go in. 



21 

CHAIRMAN BURTON: You're working on that one. 

MR. BERNICK: Believe me, it's a top priority. 

CHAIRMAN BURTON: When you set it at the 5, how 
many plans, or how soon did those voluntary plans start dropping 
out? 

MR. BERNICK: We've always had some plans drop in 
and out, 22. 

CHAIRMAN BURTON: Did that maybe send you a 
message, maybe something's wrong? 

MR. BERNICK: Well, the voluntary plans contacted 
us very, very quickly. 

CHAIRMAN BURTON: Did that give you an idea 
something was wrong? 

MR. BERNICK: It told us that, you know, we had 
to look at it, and we may need an adjustment, but consistent 
with you know what. 

CHAIRMAN BURTON: And then no action was taken, 
so you set it at 5 percent in January. 

MR. BERNICK: We actually didn't set it all. It 
just continued — 

CHAIRMAN BURTON: You just left it, so you set it 
at 5. 

MR. BERNICK: Yeah. We just basically delayed 
the decision to set it. 

CHAIRMAN BURTON: No, you left it, which set it. 
It wasn't a delay of the decision. 

Then the voluntaries dropped out. Then the 
Legislature and the administration, or administration received 



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comments for action by the Legislature and organized labor. And 
then, beginning April 1st, it went to 7. 

Soon to be Senator Kuehl introduced a bill to 
extend SDI to state employees. 

What's your position on extending SDI to state 
employees? 

MR. BERNICK: We're in the process of looking at 
that now. As you know, it's previously been for private 
employees . 

CHAIRMAN BURTON: That's why she introduced a 
bill. 

MR. BERNICK: I know, I understand. We're still 
looking at it. We have no position. 

CHAIRMAN BURTON: Do you make the position, or 
does Finance make the position, or does the Governor's Office 
make the position? How does the process work? 

MR-. BERNICK: Seriously, it's tripartide. You 
know, we get together with Finance and the Governor's Office. 

CHAIRMAN BURTON: Who's got the swing vote? 
[Laughter. ] 

CHAIRMAN BURTON: Just one last one, then 
Senator Hughes. 

In recent years, EDD changed the method of 
delivering UI services to individuals, and they have basically 
technology replacing in person with basically telephone filing. 

Do they make available at either the regional or 
district centers phones for people that, like, actually either 
don't have phones, one, and then, do you make aware to them that 



23 

they've got a phone to utilize on that? 

MR. BERNICK: Two things real quick on it. 

There has been a movement previously to move both 
UI and DI to more of a phone based system, which has its own, I 
think, advantages for a great number of people. It just makes 
it much easier to get on the phone rather than go down to EDD 
and wait. 

We do have two things. We have provision in each 
office so that we have individuals who know about the process so 
that individual questions can be asked, and we do have the phone 
system. So, if you go into a one-stop, you can not only pick up 
the phone and call UI, but you can ask someone at the desk a 
specific question. 

CHAIRMAN BURTON: When they call on the phone, do 
you know what happens? Do you get like a please hold? Do you 
know the number you're calling? How does it work? 

MR. BERNICK: The way it should work is that 
they're able to get a question — 

CHAIRMAN BURTON: How does it; do you know? 

MR. BERNICK: You know, these are issues that 
we're continuing to try to improve. 

CHAIRMAN BURTON: So, you're staffed 
sufficiently? Or electronic, when you call, where ever you call 
these days, and you get nothing but computers. 

If you could kind of us let us know back like how 
long the average wait, or whether they can get to them right 
away, or if you need more people to field it. 

Lastly, the Governor's talking about earmarking 



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35 million in Welfare to Work funds, and 15 million in federal 
funds to recruitment and retention training of workers in 
nursing homes, and for IHSS. 

Do you know how you're going to spend that money? 

MR. BERNICK: No, we're working with the Health 
and Welfare Agency to develop a program. 

CHAIRMAN BURTON: Do you know what the wages will 
be for the people in that? 

MR. BERNICK: Well, that's the challenge. Right 
now, those home health aides make about $7.50 to $80 an hour for 
jobs that are physically, psychologically demanding. So, the 
result is, you get a huge turnover of people. They come in and 
out . 

And the employers are very dissatisfied who we've 
met with, and the unions are very dissatisfied. These are very 
low, low wages. 

Independently of that, as a department we've been 
working with the Governor's Office on a whole new form of 
apprenticeships, is there some way to stabilize the workforce by 
providing upward mobility. In other words, take the same 
apprenticeship model that we have and that has worked so well in 
the building and craft trades, and apply that to a health model. 
That, it seems to me, is ultimately the way you have to go. 

You can only stabilize that workforce if you give 
people a chance to move up. 

CHAIRMAN BURTON: You may have apprentice in-home 
support services — 

MR. BERNICK: You take something like home health 



25 

aides. So, right now, somebody starts as a home health aid, and 
there's not that much — it's basically a stand-alone job. 
There's not that much opportunity. 

So what happens? So people come in and out. 
They work for a short time. 

CHAIRMAN BURTON: You'll train them to be nurses? 

MR. BERNICK: Well, since there's a variety of 
jobs below RN, between RN and home health aid, is there some way 
you can have people work, and through the same thing as the 
craft approach, working on the job, learning on the job, getting 
certifications, be able to move up in wages, you know, 
responsibility; most of all in wages. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: No questions. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: We're in the third year of a 
five-year grant from the U.S. Department of Labor on the School 
to Work Opportunities Act. 

I've always been curious, and never gotten the 
answer to this, what do you do with helping the students who are 
in high school, to help them to enter employment? Everybody 
helps the student in high school that's getting ready to go to 
college, one way or the other. They help them enough, or they 
don't help them enough. 

What do you do to help the regular person in 
terms of making them aware of jobs that are available, what 
their choices, are and especially since you're dealing with a 
very anxious, mature population that is in a great dilemma, 



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where do they go? What does your agency do to help them? 

MR. BERNICK: Basically, we have four things, but 
I think there's a lot more that we're looking at doing. You 
know, it's very interesting. We've had a long-term plan, a 
program that's Regional Occupation Program, to get people work 
part-time, so it's been going on for a long time. It's actually 
very successful, and EDD's been involved in it. 

But, you know, under the name of progress, the 
last decade or so, people have said, oh, this doesn't work, and 
so forth. And they've started this whole thing called School to 
Career, where most of that money, in my view, has gone far too 
much with just simply administration. Whereas, this regional 
plan has direct. 

What we've tried to do is direct the money more 
to specific internships or movement in, direct money more in 
terms of specific programs that take people who aren't going to 
college. We have one now with the Hollywood Entertainment 
Museum to train people for the entertainment industry, perhaps. 
There's a whole variety of jobs we have in that. 

We have the YEOP Program, you know, peers, but if 
you're asking me, my sense is that we need to continue to look 
both at improving skills and also working with employers to try 
to alter somewhat the structure of the job market, in other 
words, so that you don't have jobs that are basically 
stand-alone, like home health aid or these others, and that 
don't lead anywhere. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Senator Knight. 



27 

SENATOR HUGHES: May I cast a vote and move his 
appointment, and go to Health. 

CHAIRMAN BURTON: Yes. 

SENATOR KNIGHT: My understanding as to how you 
set the rates, and you also indicated that you didn't change the 
rates. You just left them the way they were the first part of 
the year. 

I thought there was a statutory formula that was 
to be used to set the rate. Did that formula then justify the 
rate that you left? 

MR. BERNICK: Right. Under statute, the EDD 
Director, based on formula, sets the rate once a year. 

By the time it was October or November, we had 
some projections of what we thought the solvency of the fund 
would be. But meanwhile — 

SENATOR KNIGHT: Did the formula indicate that? 

MR. BERNICK: When you say the formula, 
basically, we have an economy that's going gang-busters beyond 
anyone's expectation. 

SENATOR KNIGHT: Is there a formula that you use 
to establish the rate? 

MR. BERNICK: Well, there is a formula that we 
use. 

SENATOR KNIGHT: Did we use it? 

MR. BERNICK: We used it, sure. 

SENATOR KNIGHT: And it came out — 

MR. BERNICK: Well, it came out based on what 
your projections are of the solvency of the fund. 



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Right now, we raised it to .7 , so there's one 
hundred million plus projected at the end of the year for the 
fund. The fund should be in good shape. 

You know, given the strong economy, it could well 
even go over that. 

I can only say on that, this is such a strange 
economic time in terms of the unemployment rate. 

CHAIRMAN BURTON: It's clear that for whatever 
reason, somebody didn't want to raise the rates. It had nothing 
to do with mathematics. It had nothing to do with the statute. 
It had nothing to do with the projections, because as soon as 
they were forced to really take look at it, the rates were 
raised. So, it wasn't that complicated once the heat got put 
on. 

Senator O'Connell. 

SENATOR O'CONNELL: Move. 

CHAIRMAN BURTON: It's been moved by Senator 
Hughes. Call the roll. 

I'm sorry, do you have your family here, Mike? 

MR. BERNICK: No, they're back in San Francisco. 

CHAIRMAN BURTON: Witnesses in support, briefly. 

MR. HARD: Senator Burton, Members of the Rules 
Committee, my name's Jim Hard. I am the Civil Service Division 
Director for CSEA. We represent about ten of the twelve 
thousand workers that Michael directs. 

I'd like to say that recent communications have 
caused us to take the position that we do not oppose his 
confirmation, and we're betting on his courage to face the very 



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difficult issues in this department and resolve them. 

Thank you. 

CHAIRMAN BURTON: Like there's some bombs 
somewhere that he's got to defuse? What are these dangerous 
issues. 

MR. HARD: Did I say dangerous? I think I 
said — 

CHAIRMAN BURTON: Is there any other kind? Grave 
danger. Whatever it was, difficult. 

MR. HARD: Yes, difficult. 

CHAIRMAN BURTON: Like what? 

MR. HARD: Like the rate of decisions that an 
eligibility worker has to make every day to give the employer 
community a quality determination of eligibility and carry out 
the law, as you were just referring to. Or give the unemployed 
individual the fair break and the proper decision based on all 
the facts. 

That is a very fundamental issue in the 
department. And it's a difficult one because it's what the 
department's budget is based on. 

So, these are very difficult things to deal with 
from anybody's point of view, and when you have leftover 
Wilsonites hanging around, it makes it even more difficult. 

I could go on. 

[Laughter. ] 

CHAIRMAN BURTON: You've got two leftover 
Wilsonites here. Maybe even three; who knows? 

MR. RANKIN: Tom Rankin, California Labor 



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Federation, here to support the confirmation of Michael Bernick. 

As Senator Burton pointed out, we did have some 
problems regarding the DI tax rate. I think those are past, and 
I hope that the lessons were learned. 

We have had for the first time, I think, in 16 
years, a door opened to us in EDD that was closed before. And 
we've worked very closely with Michael on job training issues 
and on issues of the underground economy. And we are looking 
forward to working with him on the issue of the UI benefit 
increase . 

CHAIRMAN BURTON: Thank you. 

MR. CENTER: Thank you. Chuck Center with the 
California State Council of Laborers. 

We're supporting Director Bernick and also for 
the job training areas but also specifically for the underground 
economy enforcement area. We appreciate the activity he's 
expressed in there by activating additional staff to the task 
force to implement Senator Johnston's original legislation and 
your continuing legislation, SB 319. We appreciate working with 
Mr. Bernick in the future. 

Thank you. 

MR. HAUPE: My name is Scott Haupe. I'm a small 
business owner and the Vice President of the Small Business 
Network in San Francisco. 

And we're here to support the appointment of 
Michael Bernick. 

As most of you know, the issue of a skilled 
workforce is probably the number one issue for small business. 



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And Mr. Bernick has — when he got the initial appointment, came 
to us very early on and asked for our input as to what small 
businesses were looking for, and has been working with us for 
about the last year. 

The other aspect of the Small Business Network 
is, we put together a Welfare to Work program called Job 
Network, which is the model program for small business in the 
United States. We're going to be moving the next step into 
career development, and it's very important to our program in 
San Francisco, and I believe small business 's ability to hire 
people on welfare that we work very closely with EDD. 

Thank you. 

CHAIRMAN BURTON: Is there any opposition to this 
appointment? How about those supporters just come up, name, 
rank, and leave your serial number out. 

MR. HARPER: Good morning, Mr. Chairman and 
Members of the Committee. I'm a veteran, so I think I can do 
that. 

My name is Don Harper, and I'm President of the 
California Association of Veteran Service Agencies. 

We've had a long relationship with this 
gentleman, and we support this. It'll be good for the Governor 
and for everyone here. 

CHAIRMAN BURTON: We have a full agenda. You can 
leave out the salutations, too. 

MS. HAMILTON: Virginia Hamilton, California 
Workforce Association. 

We support the confirmation of Michael Bernick. 



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CHAIRMAN BURTON: Thank you. 

MR. DAVENPORT: Allen Davenport with the Service 
Employees International Union supporting. 

MR. CUNHA: Manuel Cunha, President of the Nisei 
Farmers League, and we would like the support of Michael 
Bernick. 

Thank you. 

CHAIRMAN BURTON: Thank you. 

MR. GABRIEL: Roy Gabriel, representing the 
California Farm Bureau Federation. Support. 

MR. NALDOZA: Art Naldoza, representing La 
Cooperativa in support. 

MR. RAMIREZ: Frank Ramirez, representing the 
American GI Forum in support of Michael Bernick' s appointment. 

MR. VILLARINO: My name is David Villarino. I'm 
with the United Farm Workers, National Director for Collective 
Bargaining. And I'm here to support the nomination of Michael 
Bernick for EDD Director. 

MR. MOLINA: John Molina, President of the Union 
Label, Sacramento. I'm here in support of him. 

MR. OWENS: I'm Howard Owens. The Congress of 
California Seniors supports this nomination. 

MR. CURRAN: I'm Mike Curran, Executive Director 
of the NOVA Private Industry Council in Silicon Valley, 
supporting Michael's appointment. 

MR. NAVARRETTE: Miguel Navarrette, representing 
Cafe de California, a state workers association, very much in 
support . 



33 

CHAIRMAN BURTON: Witnesses in opposition? 

Moved by Senator Hughes, call the roll. 

SECRETARY WEBB: Senator Hughes. Senator Knight. 
Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. For Senator Hughes, 
add Aye. Four to zero. 

CHAIRMAN BURTON: Congratulations. 

Matthew McKinnon, State Air Resources Board. 

SENATOR O'CONNELL: Mr. Chairman and Members, 
Matt McKinnon is currently before us for the Air Resources 
Board. He's a product of the San Diego school system, including 
the public school system in San Diego, as well as the community 
college system. 

He then showed the good judgment to transfer to 
Cal Poly in San Luis Obispo, where he also enjoyed success, 
returned to San Diego to have numerous occupations and jobs, 
including Health and Safety for the California Labor Federation, 
the machinists in the San Diego area. 

He's bringing a unique background and experience 
to this position, has been able to generate wide spread support 
from the business community, including California Manufacturers 
Association, CEEB, Californians for Economic and Environmental 
Balance. He has the support of the labor community as well. 



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Senior organizations have backed him as well as the 
environmental community, both the Sierra Club, the League of 
Conservation Voters. 

He's also received numerous awards, most recently 
last year in Ventura, Santa Barbara, San Francisco County. He 
was recognized for being the Labor Leader of the Year. He's 
traveled extensively throughout California, has a very good 
grasp on issues throughout our state. 

I share with enthusiasm Governor Davis 1 potential 
for Matt in this position. 

MR. McKINNON: Thank you, Senator O'Connell. 

Good afternoon, Senator Burton and Committee 
Members . 

I'm honored to appear before you today to 
consider my confirmation to the Air Resources Board. I consider 
it a great privilege to receive your consideration and that of 
the Governor. 

I consider the appointment as one of the two 
public members as particularly a position of responsibility, and 
I think we are well charged to protect the health and safety of 
the people of the State of California while keeping an eye on 
the California economy. 

I fully support the Governor's concern for the 
quality of air. And during our first board meeting, we dealt 
with the MTBE issue. Since that time, we dealt with consumer 
products, and it was in the process of dealing with consumer 
products that I really formed kind of a direction that I want to 
make sure that I disclose at this hearing today. 






35 

And during the process of dealing with consumer 
products, we began to regulate a foaming hair mousse. 

And in the process of regulating the foaming hair 
mousse, and clearly, consumer products needed to be regulated, 
there needed to be changes, I began to evaluate how much and how 
many interests in our state have worked hard to sacrifice to 
make sure that the quality of the air was improved, with one 
notable exception. And that notable exception, I believe, is 
that we have a long, long, long ways to go in dealing with 
diesel emissions. Most of the problem left to deal with. 

So most recently, the Board addressed the transit 
bus issue. And in that approach, rather than fully working on a 
CNG path, there were three alternatives put into place. And I 
think in many, many ways, that describes how I would like to 
approach this Board. 

We need to keep competition between fuels. We 
need to keep competition between technologies, and we've gained 
a great deal in this state in terms of working things that way. 
And as we approach diesel, there's major, major improvements we 
can make. 

I'm also very enthusiastic about some of the 
other technologies that I have been involved in, supporting 
zero-emission vehicles for a long, long time, since the very 
beginning. And most recently, have not had much activity on 
that, but I'm very, very interested in the progress that the ZEV 
mandates pushed. A lot of technology was moved forward by 
developing zero-emission vehicles. 

We currently are headed into dealing with the 



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school bus transit issue. And we have a great deal of work to 
go. And I understood from questions earlier there's some 
concerns about the direction that goes. 

I believe that the $50 million will fix about 800 
buses with particulate trap technology. And it may be that 800 
buses is the most we could do in a first year, just because 
there's a lot of thinking to do about how you fit retrofit 
technology to existing buses in existing engines. So, it may 
well be that that 800 is a fair first year's approach. It 
certainly does not get us through 17,000 buses in the State of 
California . 

SENATOR LEWIS: Question. 

You were in the room when Dee Dee D'Adamo, I 
asked her the question about retrofitting versus replacement, 
and she gave some figure on the number of buses that could be 
retrofitted. I think it was in excess of 10,000. 

MR. McKINNON: I think there's a digit slip 
there. Instead of 8,000, it's 800, unless I did something wrong 
with my math. But I think the first sweep of it, it's more like 
800. 

CHAIRMAN BURTON: That's retrofit, not 
replacement — 

MR. McKINNON: That's retrofit. 

Now, replacement, I think you get, if you do CNG, 
you're talking 340 buses. If you do kind of traditional 
technology but enhanced engines, better diesel engines, that 
kind of thing, you're talk about 520 buses. 

So, I tend to favor moving the most coverage of 






37 

kids as possible. So, I think diesel retrofitting is the 
direction to go, but I don't think you get very many done in a 
hurry. 

One thing about diesel retrofitting technology 
that's about to happen is, the Europeans are about to adopt, I 
think by 2005, it'll be in trucking in Europe. So, the retrofit 
technology cost is going to go way, way down because of 
economies of scale. Instead of like producing a few thousand 
particulate traps for California, it'll be 20,000 in Europe and 
some in Hong Kong, and some in other places. 

As time goes on, the cost may go down. 

SENATOR LEWIS: In your initial comment, you made 
some comment about CNG, where it sounded like you were somewhat 
dismissive of that as an alternative. Is that based on cost, or 
is there something else? 

MR. McKINNON: Well, yeah, if I sounded that way, 
it's not intentional. I think it's good to have different fuels 
competing. I think that's a good thing. 

I do worry about the cost. Mostly it's an 
infrastructure cost question, because you have to put in 
infrastructure for CNG. 

SENATOR LEWIS: But there was nothing else other 
than cost that you were alluding to? 

MR. McKINNON: No. 

CHAIRMAN BURTON: This 50 million, is it grants, 
is it loans, is it like shared cost, or what? Or is that up to 
us? 

MR. McKINNON: I don't know, Senator. 



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CHAIRMAN BURTON: In other words, he puts up 50 
million, and I guess that it's in the budget, so we could 
determine grants, shared cost, or whatever. 

Would you know what is the deal with diesel? Why 
diesel? 

I remember just watching trucks going up 1-80 
with that stuff coming. 

Was it just at one time a cheaper gas? Better 



gas mileage? 



a long time. 



MR. McKINNON: The engines run cooler. They last 



CHAIRMAN BURTON: Better for the engine. 

MR. McKINNON: They last a long time. 

And if you have low sulfur diesel, you can do a 
lot to clean up what comes out of that smoke stack, a tremendous 
amount, like 80 percent of it. 

You know, clearly there hasn.' t been the political 
will, and frankly with trucking, you're talking you really have 
to change the low sulfur content nationally for it to work, 
because you have trucks going across boarders and that kind of 
thing. 

CHAIRMAN BURTON: I think we'd rather do that 
than do than have to, at some point, either change truck stop 
engines, or maybe get whatever it is. 

With a wishy Legislature like us, like last year 
we gave them a lot of money so they could do it, which made a 
lot of sense to me, to give United Parcel taxpayers' money so 
they could get cleaner diesels. 



39 

Senator Hughes. 

SENATOR HUGHES: No questions. 

CHAIRMAN BURTON: Senator Knight. Senator 
O'Connell. 

SENATOR O'CONNELL: I just noticed on the $50 
million program, it's designed to be a grant program to the air 
districts, and the air districts, in turn, to the school 
districts. It's for 1977 and prior. 

CHAIRMAN BURTON: Do you think that's a smart way 
to do it? 

SENATOR O'CONNELL: I don't know. 

CHAIRMAN BURTON: Can't you see all the lobbying? 

SENATOR O'CONNELL: Although, not all buses would 
qualify. It's post- '77 buses. 

CHAIRMAN BURTON: Each Senators' district office. 

SENATOR O'CONNELL: To distribute. Our own 
version of the Lottery. 

CHAIRMAN BURTON: Exactly. 

MR. McKINNON: Senator, at the first run at it, 
you may want to do something like that just to make sure that 
when people match the technology with particular engine and 
chassis, they do it best way so that in the future, you don't 
spend a lot of money doing it. 

CHAIRMAN BURTON: Probably the districts are more 
qualified to do that kind of stuff? Maybe not. 

MR. McKINNON: It may actually be ARB. They have 
a good facility down south that does a lot of mechanical work 
that thinks about things like that. 



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CHAIRMAN BURTON: Did you bring any family? 

MR. McKINNON: I did. I'd like to introduce my 
wife and partner in life, Jody Ansel. My father, Bob McKinnon, 
came up from Carlsbad today. 

CHAIRMAN BURTON: Witnesses in support, briefly. 
Name, rank, and serial numbers. 

MR. RANKIN: Tom Rankin, California Labor 
Federation. 

MR. BROAD: Barry Broad, Teamsters and 
Amalgamated Transit Union. 

MR. OWENS: Howard Owens, Consumer Federation of 
California. 

MR. CARTER: Art Carter, California Pipe Trades 
Council, State Association of Electrical Workers, and the 
Western States Sheetmetal Worker Union. 

MR. CENTER: Chuck Center, Laborers Union. 

MR.- MANNING: Ed Manning, Western States 
Petroleum Association. 

MR. PELOTE: Willie Pelote, American Federation 
of State, County, and Municipal Employees. 

MR. DAVENPORT: Allen Davenport with the Service 
Employees International Union. 

MS. SPELLISCY: Sandra Spelliscy, Planning and 
Conservation League. 

MR. CAMP: Bill Camp with the Sacramento Central 
Labor Council. He's one of our members. 

CHAIRMAN BURTON: Anyone in opposition. 

SENATOR HUGHES: Move the nomination. 



41 

MR. PACE: Good afternoon. My name is Felice 
Pace. I've worked for the Klamath Forest and represent the 
Klamath Forest Alliance, a community-based group out of Etna, 
Siskiyou County. 

As a life long Democrat and a labor supporter, 
I'm delighted when I see folks from labor appointed to these 
boards that deal with the environment. 

I would hope, however, that in a Democratic 
administration with a Democratic Legislature, we'd see 
appointments to the environmental boards from the ranks of 
progressive labor which recognizes the key importance to the 
economy and the welfare of workers of a clean environment, 
including clean air and clean water. 

Now, I want to call to your attention as a 
citizen, I want folks on these boards to be independent, 
particularly of the regulated community, the community that they 
have to regulate, usually industrial communities. 

In this regard, I want to bring to your attention 
a letter dated March 9th, 2000. Mr. McKinnon is one of four 
signatures on this letter. It's a letter to the California 
Board of Forestry from the Forest Products Industry, National 
Labor Management Committee letterhead, and the subject is 
protection for threatened and impaired watersheds 2000. 

I want to quote two small things, if I may, from 
this letter. "The proposed rules rely heavily on a scientific 
review panel report. This report was a compilation of public 
input that is little more than an opinion poll." 

That scientific review panel, the scientific 



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committee/ was appointed jointly by the California Department of 
Forestry and Fire Protection, and the National Marine Fisheries 
Service and its distinguished scientists. And trashing good 
science is something I don't think we need to do on an Air 
Resources Board. 

I'd also like to quote, "Therefore," this is 
toward the end, "even on an interim basis we do not support the 
implementation of streamside buffer zones, " and it adds, "that 
are not science-driven and are inflexible." 

These rules are supposed to respond to the crisis 
that we have with salmon and steelhead in our rivers, and the 
crisis of coastal communities and the fishermen that depend on 
those, and the workers that depend on those. It's supposed to 
deal with impaired watersheds where we're not meeting, and 
haven't met, our own criteria that we set up through the basin 
plans . 

And basically, you know, in. addition to that, the 
timber industry, which has stonewalled these, and we worked for 
six months on these rules, and then they said no deal and 
rewrote them today or last night, in the back rooms, this is not 
the kind of person I think we need sitting on these boards. 

And I'm very concerned about the fact that 
burning is very important to these timber companies that are 
behind this. That's an issue that is of great concern, and 
there's a lot of trade-offs there, and there's a lot of money at 
risk in who gets to burn what in the Central Valley and in the 
mountains around it. 

So, I think there is a conflict of interest 



43 

there. I don't think that there's too much closeness, and I 
don't think this represents what is best in labor, which 
recognizes that the environmentalists, not regressive 
industries, ought to be their allies. 

Thank you. 

MR. McKINNON: I believe in science, and I think 
watershed analysis is the way to do things in analyzing how we 
treat streams and forestry. 

I don't think buffers are a scientific way to do 
that. You'd have varying geographies, geology, plant life, 
different covers, different types of streams, different types of 
fish, and blanket buffers just plain don't — it's a 
one-size-fits-all . 

And I guarantee you that if confirmed on the Air 
Board, I'm going to act the same way, consistently. It isn't — 
it isn't the right way to do things. 

And certainly I do not own stock in a timber 
company. I do not benefit one way or another in terms of how 
this works out. Certainly, the Machinists Union may gain 
members, may lose members. I don't have a financial interest in 
this. I don't have an overriding philosophic interest in this. 

I have a charge in my other life, and that's to 
defend the members that I represent, sir. And I do that as 
honestly and most straight-forward as I can do that. 

When there's bad science from environmentalists, 
I'm going to say there's bad science. When there's bad science 
from the industry, I'm going to say there's bad science, to the 
extent I understand it. 



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CHAIRMAN BURTON: Any other witnesses in 



opposition? 



Moved by Senator O'Connell, call the roll. 

SENATOR KNIGHT: Just a short question. 

What do you mean by a buffer zone? 

MR. PACE: Buffer zones are on the streams in 
order to protect them. 

The Northwest forests, the scientists from all 
over the west that put together the federal protections have 
buffer zones. Our whole — any rules we have are blanket 
rules. 

SENATOR KNIGHT: Is it in a restricted area? 

MR. McKINNON: Senator, I shouldn't have passed 



it up. 



stream. 



It's a prescribed number of feet to protect the 



CHAIRMAN BURTON: You can't cut close to the 
water, because if you cut close to the water, stuff will get in 
and the fish will die. 

MR. McKINNON: Right. 

MR. PACE: But some people want to cut next to 



the stream. 



CHAIRMAN BURTON: Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 



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SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

MR. McKINNON: Thank you. 

CHAIRMAN BURTON: Next, Robert Pernell, who had 
the arrogance to assume that we were going to confirm him and 
sent out invitations to a celebration of his confirmation. 

[Laughter. ] 

CHAIRMAN BURTON: Chuck Center said, I just 
figure we ought to stiff him, and see how many people go to the 
party anyway. 

[Laughter. ] 

CHAIRMAN BURTON: Senator Peace. 

SENATOR PEACE: Mr. Chairman and Members, only 
someone who was so confident of their confirmation that they had 
already planned their celebration would ask me to introduce 
them. 

[Laughter. ] 
SENATOR PEACE: So, I'm here. 

Let me just say that we all know Mr. Pernell very 
well. His service on the SMUD Board, on the Council for 
Environmental and Economic Balance, and his experience here in 
this building for the California State Council of Laborers is a 
consistent record of recognizing the critical need to connect 



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46 

conservation and environmental protection with our energy 
future . 

And in an environment in which we are moving into 
the brave new world that I know that the Chairman feels very 
enthusiastic about in competition in the electrical industry, 
his focus and history and experience in electrical vehicles and 
in pursuing demand-side management programs, and all of the 
other variety of things that are critical to truly making a 
market work in the benefit of the environment as well as 
consumers is critically important in this position, and I 
support his appointment enthusiastically. 

CHAIRMAN BURTON: Well put. 

Bob. 

MR. PERNELL: First of all, thank you, Senator 
Peace. 

Senator Burton, Members of the Committee, I'm 
proud to be here, and I will thank you for your consideration of 
my nomination. 

I also want to thank the Governor for appointing 
me to the Energy Commission. 

My career has spanned both ends of the energy 
spectrum. My first job as it relates to energy was helping 
build Rancho Seco. That might be a sore subject. 

CHAIRMAN BURTON: You're forgiven. 
[Laughter. ] 

SENATOR PEACE: It's the cleanest nuclear plant 
in the country. 

[Laughter. ] 



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CHAIRMAN BURTON: The Bodega power plant, they 
didn't build that. 

[Laughter. ] 

MR. PERNELL: I worked as a concrete specialist 
for the Laborers Union at that time. About six years ago, I was 
elected to the SMUD Board, the Sacramento Municipal Utility 
District, where I served one term as President, two terms as 
Vice President. 

And again now, I've been chosen by the Governor 
to serve on the California Energy Commission. And I certainly 
am knowledgeable and will do a good job at that Commission. 

I am fortunate to be serving at the California 
Energy Commission during its 25th year of operation. This is 
our Silver Anniversary. 

My goals for the Commission consist of building 
on the Commission's outstanding record of successes. In the 
last 25 years, the Energy Commission developed energy standards 
for new buildings and appliances that have already saved over 
1.4 billion in energy costs, and that amount is growing. 

For the past ten years, I was the Director of 
Research and legislative advocate for the California State 
Council of Laborers. That experience is the bedrock of my 
relationship with you and the Legislature. 

It is my commitment to work constructively with 
the Legislature, and to provide information and analysis needed 
for decision making on a timely basis. 

I have policy goals in three or four different 
areas. One of them is school, energy efficiency in schools. To 



48 

extend the public good charge, because we think that it is of 
benefit to the state, it has been of benefit to the state, and a 
commitment for clean fuels. There was some conversation about 
diesel . 

There is a commitment for clean fuels that we 
have, and we are working at the Energy Commission to come up 
with alternative fuels, also in the electric vehicle arena. And 
we have been successful in securing the largest roll-out of 
electric vehicles in the country, working with the Post Office 
and postal vehicles. 

I would just end by saying, my main goal is to 
maintain California's status as a leader in critical energy 
issues. And I had about six pages, but I was told to cut it 
short, and I'm doing that. 

I would also open it up for questions, Senator 
Burton. 

CHAIRMAN BURTON: Are you here as the Chairman of 
the Commission or as a member? 

MR. PERNELL: As a member of the Commission. 

CHAIRMAN BURTON: Why did you keep bothering me 
for an appointment to talk to me? 

MR. PERNELL: Why did I keep bothering you? It 
goes back to my — 

CHAIRMAN BURTON: You're just being — 

MR. PERNELL: — legislative advocate experience. 
[Laughter. ] 

CHAIRMAN BURTON: Like you were going to tell me 
something I didn't know. 



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Senator Lewis. 

SENATOR LEWIS: Just one question. 

I guess you've been appointed to fill the 
environmental protection slot. 

MR. PERNELL: That is correct. 

SENATOR LEWIS: What is it in your resume and 
your past experience that gives you any kind of technical 
experience to qualify in that position? 

MR. PERNELL: Well, I've worked with the SMUD 
Board in terms of technical experience. In the environmental 
arena, I worked with John White. We've done a lot of 
environmental clean energy with photovoltaics . 

As a member of the Laborers, and working with 
environmental organizations, and Friends of the River, so, I 
worked on those, within those organizations, to talk about 
pesticides going down the Sacramento River. 

I'm also a fisherman, so I was concerned with 
that. 

We have — I have not an extensive environmental 
background, but I think it's enough to qualify me for the 
position. 

SENATOR LEWIS: I'm going to vote for your 
confirmation, but I will say that in past years, if Governor 
Wilson had brought up someone with about the same amount of 
experience, I've sat on this Committee in years past when most 
people were turned down for lack of experience. 

CHAIRMAN BURTON: Not when I was sitting. 

SENATOR LEWIS: That was a different 



50 

administration. 

MR. PERNELL: Senator, I appreciate your 
confidence in me. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: I'd like to move the nomination. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: No questions. 

CHAIRMAN BURTON: Now, are we all invited? 

I'll tell you something, with friends like 
Center -- do you have any family here, Bob? 

MR. PERNELL: Yes, Senator. I have my wife and I 
think my daughter, because I heard my grandkid crying. She must 
be outside. And I have my mother and father, my brother-in-law, 
sister-in-law, and my sister. 

CHAIRMAN BURTON: That's who was making the 
noise? 

MR." PERNELL: That was my grandson, yes. 
Normally when we walk precincts, everybody goes. So, everybody 
came here. 

CHAIRMAN BURTON: Witnesses in support. 

MR. CENTER: Chuck Center. 

We support Robert. It's our loss and the state's 
gain. We miss him at State Council, but the state benefits. 

MS. SHORI : My name is Jan Shori. I'm the 
General Manager of the Sacramento Municipal Utility District. 

I wanted to support Robert's confirmation. 

Thank you. 

MR. RANKIN: Tom Rankin, California Labor 



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Federation. 

MR. MOLINA: Tom Molina, President of the Union 
Label, Sacramento, here in support of Robert Pernell. 

MR. WINSTEAD: Joe Winstead, California State 
Pipe Trades Council, in support. 

MR. BERNACCHI: Eddie Bernacchi on behalf of the 
National Electrical Contractors Association and the California 
Legislative Conference of the Plumbing, Heating and Piping 
Industry in strong support of Robert's confirmation. 

MR. ALVAREZ: Manuel Alvarez with Southern 
California Edison. We support Mr. Pernell for the appointment 
of Energy Commissioner. 

MR. CARTER: Art Carter, representing the State 
Association of Electrical Workers and the Sheetmetal Workers 
Union in support. 

MR. CLINE: Bob Cline, representing the Electric 
and Gas Industries Association in support. 

MS. EDSON: Karen Edson, representing the 
Independent Energy Producers Association. We're in support. 

MR. PELOTE: Willie Pelote, representing the 
American Federation of State, County and Municipal Employees, in 
strong support. 

MR. POSNER: Howard Posner, SMUD Board of 
Directors in support. 

MR. BAKER: Steve Baker with Aaron Read and 
Associates, representing the California Association of 
Professional Scientists, in support. 

MR. JONES: Craig Jones, small business owner, 



52 

community activist, in full support. 

MS. DAVIS: Thank you. Linda Davis, SMUD Board 
Director, in support. 

MR. MENDEL: Warren Mendel, Southern California 
Contractors Association. I'm delighted to endorse Bob. 

MR. OWENS: I'm Howard Owens with the Congress 
of California Seniors in support. 

MR. WHITE: John White with the Sierra Club and 
the Clean Power Campaign. We're in support. 

MR. CREMINS: Tim Cremins at Operating Engineers 
in full support. 

CHAIRMAN BURTON: Witnesses in opposition. 
• SENATOR HUGHES: Move it. 

CHAIRMAN BURTON: Moved by Senator Hughes. Call 
the roll. 

SENATOR PEACE: I have been assured, 
incidentally, that the celebration is handicapped accessible. 

CHAIRMAN BURTON: Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. 



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53 



O'Connell 



CHAIRMAN BURTON: Keep it open for Senator 

Congratulations, Robert. 

[Thereafter, SENATOR O'CONNELL 
added his Aye vote, making the 
final vote 5-0 for confirmation.] 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 2:55 P.M.] 
— ooOoo — 



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tSXjQ day of /]^^u^L , 2000. 



54 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California/ do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 




1LYN J.JAIZ1 
Shorthand! Reporter 



391 -R 

Additional copies of this publication may be purchased for $3.25 per copy 
(includes shipping and handling) plus current California sales tax. 

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Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 391 -R when ordering. 



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^HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUMENTS DEPT. 

MAY 2 2 2000 

SAN FRANCISCO 
PUBLIC LIBRARY 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

WEDNESDAY, MARCH 29, 2000 
4:00 P.M. 



392-R 



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Shorthand Reporter 



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APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

SENATOR JACK ' CONNELL 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

ALSO PRESENT 

LYNDA S. TERRY, Director 
Department of Aging 

SENATOR JOHN VASCONCELLOS 

JOHN KEHOE, Executive Director 
California Commission on Aging 

BETTY PERRY 

Older Women's League 

HOWARD OWENS 

National Council of Senior Citizens 

PETE MARTINEAU 

Congress of California Seniors 



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JIM DRENNAN 

California Council, Alzheimer's Association 

LYDIA MISSAELIDES 

California Association for Adult Day Services 

PATRICK LUBY 
AARP 

RAUL GALINDO, Member 

Youthful Offender Parole Board 

ROBERT PRESLEY, Secretary 

Youth and Adult Corrections Agency 

GILBERT J. SANDOVAL, Member 
Youthful Offender Parole Board 

JOHN DINEEN, Chief Executive Officer 
PORAC 

AARON READ 
Representing Himself 

UTE WATSON, Member 

Youthful Offender Parole Board 

DON NOVEY 
CCPOA 

PAM DOUGLAS, Executive Director 
Corrections Institute of America 

DEBORAH WILSON 
CCPOA/ PAAC 

SCOTT JOHNSON, President 

Parole Agents Association of California 

MICHAEL STAPLETON, Vice President 
Parole Agents Association of California 



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IV 

INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

LYNDA S. TERRY, Director 

Department of Aging 1 

Introduction and Statement in Support by 

SENATOR JOHN VASCONCELLOS 1 

Background and Experience 2 

Questions by CHAIRMAN BURTON re: 

Long Term Care Tax Credit 3 

Questions by SENATOR LEWIS re: 

Expansion of Medi-Cal Benefits Versus 

Tax Credit 4 

Questions by SENATOR HUGHES re: 

Long Term Care Integrated Pilot Projects 5 

Witnesses in Support: 

JOHN KEHOE, Executive Director 

California Commission on Aging 6 

BETTY PERRY 

Older Women' s League of California 7 

HOWARD OWENS 

National Council of Senior Citizens 7 

PETE MARTINEAU 

Congress of California Seniors 7 

JIM DRENNAN 

State Council, California Alzheimer's Association 7 



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LYDIA MISSAELIDES 

California Association for Adult Day Services 8 

PAT LUBY 

AARP 8 

Motion to Confirm 8 

Committee Action 9 

RAUL GALINDO, Member 

Youthful Offender Parole Board 9 

Background and Experience 9 

Questions by SENATOR HUGHES re: 

Insufficient Funding for Severely 

Mentally 111 Parolees 10 

Ask Governor for More Money in 

Budget for Counseling 10 

Response by ROBERT PRESLEY, Secretary 

Youth and Adult Corrections Agency 10 

Questions by SENATOR LEWIS re: 

Time Add Policy Causes Youthful Offenders to 
Serve More Time than Adults 11 

Appropriateness of Sentences 12 

Response by MR. PRESLEY 12 

Motion to Confirm 13 

Committee Action 14 

GILBERT J. SANDOVAL, Member 

Youthful Offender Parole Board 14 

Background and Experience 14 

Questions by SENATOR HUGHES re: 

Where Additional Funds Are Needed 16 






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VI 



Witnesses in Support: 

JOHN DINEEN, Chief Administrative Officer 

Peace Officers Research Association 17 

AARON READ 17 

Motion to Confirm 17 

Committee Action 18 

UTE WATSON, Member 

Youthful Offender Parole Board 18 

Background and Experience 18 

Witnesses in Support: 

DON NOVEY 

California Correctional Peace Officers Association ... 19 

PAM DOUGLAS, Executive Director 

Corrections Institute of America 20 

DEBORAH WILSON, Parole Agent II 

CCPOA 2 

SCOTT JOHNSON, President 

Parole Agents Association of California 21 

MICHAEL STAPLETON, Vice President 

Parole Agents Association of California 21 

Motion to Confirm 21 

Committee Action 22 

Termination of Proceedings 22 

Certificate of Reporter 23 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: Governor's appointees today, in 
descending order or ascending order, Lynda Terry, Director, 
Department of Aging. 

Do this before the Governor changes his mind. 
[Laughter. ] 

SENATOR VASCONCELLOS : This one's so good, you 
want to do it right away before anything happens. 

As Chair of the Senate Committee on Aging and 
Long Term Care, I've had three years of working in this field 
and leading our efforts to address the aging of California and 
the programs. 

The Department is charged with the Older 
Americans Act and Older Californians Act, and many long term 
care programs in the communities. Governor Davis has appointed, 
to his credit, Lynda Terry to become the Director of that 
Department. She has her Bachelor's Degree in psychology, 
Master's in public administration, undergrad with gerontology 
concentration. 

She's worked at aging services in various ways in 
Modesto, her home county. I won't detail those. I think your 
documents already show those. 

Let me just say that I've gotten to know her over 
these past three months. She showed how smart she is by hiring 
away our consultant on Aging and Long Term Care to be her Deputy 
Director, which is a good sign about her own astuteness and 
acuity of judgment. 



I believe that she will be a solid and brilliant 
leader in the effort to assure that the Department administers 
our programs and helps the aging people of California get their 
fair shake. I'm pleased to recommend Lynda Terry to the 
Committee for your consideration, ultimately for your approval. 

CHAIRMAN BURTON: Go ahead. 

MS. TERRY: Thank you very much, Senator 
Vasconcellos . 

It's a real pleasure to be here to talk with you 
today and have you consider my appointment. I just wanted you 
to know a bit about me and answer any questions you have about 
the Department. 

I have to tell you, I have huge plans for this 
small department. It's the smallest department within the 
Health and Human Services Agency, but I think it needs to have a 
high level of visibility. As you all know, the population is 
growing older, particularly the over 85 population. Right now, 
one in 77; in 40 years, that'll be one in 34. And 47 percent of 
those who are 85 and older right now have Alzheimer's disease. 

With this growth, we need to find ways, better 
ways for people to stay where they want to be in the first 
place, which is at home, in their own communities. The 
Department of Aging is a very proactive department. It's 
focused on providing services that do keep people in their 
communities . 

What one of my goals is within the Health and 
Human Services Agency, and through the new Long Term Care 
Council, is to bring those aging issues to the forefront, so 



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that we cross departmental lines, cross agency lines. We have 
been somewhat categorical in the way we provide programs, and 
our funding streams. And I have a large background and a long 
history in collaboration and coordination, I'd like to bring 
that to the Department, and raise the level of expectation for 
this Department under my leadership. 

I have good staff. We're reaching out to new 
partners, Congress of California Seniors, Seniors Coalition, 
Older Womens League, AARP, many stakeholders, involving 
consumers more in policy decisions we make, and finding new 
partnerships by reaching out to our academic partners, which 
we've not done as well in the past as we should. 

With that, if you have any questions of me, I'd 
be glad to answer those at this time. 

CHAIRMAN BURTON: Is there anybody in that 
audience realizes I was the author of this bill in the 1970s, 
making it an independent Department of Aging? There you go. 

MS. TERRY: Thank you very much. 

CHAIRMAN BURTON: And we set it up that way so 
that, with. all respect, Governor Reagan couldn't mess with it. 

Just one question. I'm not going to ask you 
because if you answer, it you'll get in the middle of something. 

We're kind of concerned about, or if you could 
tell me, if you do know, how the administration's long term care 
tax credit is working? That's not that $500 tax credit; right? 
That's something else? Do you know what I'm talking about? 

MS. TERRY: The long term care tax, the proposed 
tax credit? The proposed is a $500, in the Governor's budget is 



a proposed $500 care giver tax credit, which could be used for 
everything from adult day health care, to home modification, 
basically giving care givers a break. 

I've seen a lot of studies in other states how 
this has worked. 

CHAIRMAN BURTON: I'd like to see them, because 
it has not rung a lot of bells with us. Some of us, anyway, see 
expanding Medi-Cal eligibility for seniors, and also do 
something more meaningful with the IHSS workers. 

Senator Lewis. 

SENATOR LEWIS: You kind of stole my question in 
a sense. 

CHAIRMAN BURTON: Which one? About who was the 
author of the bill? 

SENATOR LEWIS: No, about the $500 credit. 

With regard to the $500 credit that Senator 
Burton talked about for long term care for the disabled or at 
home, apparently the Leg. Analyst has found fault with the 
Governor's proposal, and has just suggested that the 
Legislature, as an alternative, look to expanding Medi-Cal 
benefits . 

What's your thought on that? Which approach is 
better and why? 

MS. TERRY: I don't know that there's a better 
approach. 

I guess my position is, I hear from a lot of care 
givers. They need financial assistance in whatever form it 
comes to them. And I think that that's the most important thing 



in their minds. 

SENATOR LEWIS: In the future, always say the 
Governor's approach is better. 

[Laughter. ] 

CHAIRMAN BURTON: That's why we're confirming her 
quick. 

[Laughter. ] 

CHAIRMAN BURTON: We don't want to trade off 
binding arb. or fire fighting. 

[Laughter. ] 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Back in '95, Senator Mello and 
Assemblyman Bates had two measures that had different models of 
integrating services. 

Do you have at a local level, do you have an 
update on the progress of those pilot programs, or are they 
still in existence? 

MS. TERRY: Are you talking about AB 2800? 

SENATOR HUGHES: No, AB 1020 and SB 547 by Bates. 

MS. TERRY: For the long term care integrated 
pilot projects, those projects have had slow progress. It's a 
complicated thing to try to find ways to meld the funding 
streams, particularly when you're talking about a combination of 
federal and state and local funding. 

And I do understand that — I know San Bernardino 
and Tulare Counties have worked on this for quite some time, San 
Francisco, I believe Santa Clara is looking, among others, but 
there has been — it's a very slow process. 



SENATOR HUGHES: So, we haven't really learned 
very much from those projects. 

MS. TERRY: We've learned that it's a very 
difficult thing to do, although not impossible. I think we have 
some opportunities to look at what successes they've had in 
moving forward. You know, how we can combine that with new 
efforts to expand services, through the Governor's Aging with 
Dignity initiative, and through expansion of existing services. 

So, I think we have to look at those as a whole, 
how we can move forward in a combination of progress in those 
areas. 

But it has been very slow. 

SENATOR HUGHES: But it has been helpful. 

MS. TERRY: It's been very helpful. 

SENATOR HUGHES: It's given you some sense of 
direction. 

MS. TERRY: It's given a sense of direction, and 
it's given us new ways of when we look at funding sources, and 
we make cost comparisons, how can we get to comparing apples and 
apples, and not apples and oranges in the process. And I think 
that's been very helpful. 

SENATOR HUGHES: Fine, thank you. 

SENATOR LEWIS: Any additional questions? 

Anyone in the audience wishing to testify in 
behalf of the nominee? 

MR. KEHOE: I am John Kehoe, Executive Director 
of the California Commission on Aging. 

I've had the pleasure of working with Lynda for 



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the last five years, long before she was a glimmer in the 
Governor's eye. She's done a lot for seniors, and I know' that 
she will do an outstanding job in leading this Department. 

I certainly applaud your favorable consideration 
of her nomination. 

SENATOR LEWIS: Thank you. Next. 

MS. PERRY: I'm Betty Perry with the Older 
Women's League of California. 

I think it's wonderful to be able to recommend a 
Baby Boomer to head the Department of Aging. We older women 
really appreciate her good ideas. We've watched her work. We 
know she's well trained, and we believe she's going to bring the 
Department of Aging back to the days when our member, Janet 
Levy, was important in its original work. 

SENATOR LEWIS: Thank you. Next. 

MR. OWENS: I'm Howard Owens with the National 
Council of Senior Citizens. 

Lynda has worked with our chapter down in the 
Modesto area for a number of years as the Director of the 
Department of Aging there, as well as with the Alzheimer's unit. 
And that group is directed by a fellow by the name of Wendell 
Kiezer, and Wendell thinks she's great, so we endorse her. 

SENATOR LEWIS: Next. 

MR. MARTINEAU: Pete Martineau with the Congress 
of California Seniors. 

It's our pleasure to support Ms. Terry. 

SENATOR LEWIS: Thank you. Next. 

MR. DRENNAN: I'm Jim Drennan, a member of the 



8 

State Council of the California Alzheimer's Association. 

Lynda was our first public policy director, and 
she worked with us for nearly two years and created the office 
from scratch. 

And all I've got to say is that if her 
performance for the State of California is on the same level as 
was for us, the people of California are really, really well 
off. 

Thank you. 

SENATOR LEWIS: Thank you. Next. 

MS. MISSAELIDES: Lydia Missaelides, California 
Association for Adult Day Services. 

We're here to support Lynda Terry's nomination. 
Have worked with her for a number of years. And I can tell you 
already in the few months that she's been here, she's already 
made a huge impact, as she said, in working relationships with 
groups . 

We support her nomination. 

SENATOR LEWIS: Thank you. 

MR. LUBY: I'm Pat Luby with AARP. 

We'd like to echo all the comments that've gone 
before. We've had a very good relationship working with Lynda, 
and applaud the Governor's recommendation and hope you'll come 
through with the confirmation. 

SENATOR LEWIS: Thank you. 

Anyone in the audience wishing to testify in 
opposition or raise concerns? 

SENATOR HUGHES: Move the nomination. 



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SENATOR LEWIS: We have a motion. Call the roll 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 
Senator O'Connell. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

SENATOR LEWIS: We will place that matter on 
call . 

MS. TERRY: Thank you very much. 

SENATOR LEWIS: Thank you. 

[Thereafter, SENATORS O'CONNELL, 
KNIGHT and BURTON added their Aye 
votes, making the final vote 5-0 
for confirmation.] 

SENATOR LEWIS: Next is Mr. Raul Galindo, 
Youthful Offender Parole Board. 

MR. GALINDO: I'm Raul Galindo, as you well know. 
I was appointed by the Governor in May of '99, after I retired 
from the Los Angeles Police Department after 31 years. 

I had distinguished service for the City of Los 
Angeles and the Department, where I worked various assignments 
and ended my career as the Officer in Charge of the Sexually 
Exploited Child Unit that investigated child pornography and 
computer crimes against children. 

I've been on board since May, again. The work 
has been challenging. I think I bring a lot of attributes to 
the position, and I would hope that I would be confirmed today. 



10 

SENATOR LEWIS: Thank you very much. 

Senator Hughes, any questions? 

SENATOR HUGHES: Yes. 

Thank you very much for being here today. 

The funding level allows, as I understand, 
severely mentally ill parolees to receive seven hours of 
counseling per case per year. 

How is that going to help anybody, seven hours 
over a period of a year? Do you think that's sufficient? 

MR. GALINDO: I think what would be most helpful 
is additional funding, of course, for the Youth Authority. 

My position is that I don't really have a say 
into what comes in on the budget for those programs. 

We recommend certain programs and counseling for 
minors on a need basis as recommended by staff. 

SENATOR HUGHES: Now, when we get to talk about 
the addicted parolees, they're going to receive only five hours 
per case per year. That's even less. 

And, you know, how do you really help somebody 
with giving them so little attention and so little direction? 
Are you going to ask the Governor to see that we put more money 
in a program like this, to give more direction. 

Maybe the gentleman sitting next to you should 
answer that. 

MR. PRESLEY: Mr. Chairman, Robert Presley, 
Secretary of the Agency. 

This issue is a Youth Authority issue that you're 
bringing up. And this gentleman is a member of the Youthful 



11 

1 Offender Parole Board. They don't get into programming and 

2 funding. They recommend it, but the Youth Authority carries it 

3 out. 

4 SENATOR HUGHES: So, you're the person to ask the 

5 question. 

6 MR. PRESLEY: Yeah, and the answer to that is, 

7 it's all budgetary. 

8 SENATOR HUGHES: Would you ask for more money in 

9 the budget? I'm saying, are your hands kind of strapped in 

10 terms of what you can do with so little resources? 

11 MR. PRESLEY: We, of course, come before the 

12 budget committees supporting the Governor's budget. And we 

13 don't have much latitude beyond that. 

14 Legislative committees can do what they want, as 

15 you know, as I recall. 

16 < SENATOR HUGHES: Will you be asking for anything 

17 else? 

18 MR. PRESLEY: Not today. 

19 SENATOR HUGHES: Okay. 

20 MR. PRESLEY: Later maybe. 

21 SENATOR LEWIS: There was an L.A. Times article 

22 back in December of '99 that said because of the time add policy 

23 that you have, that youthful offenders spend more time 

24 incarcerated on virtually every other crime, with the exception 

25 of murder, than adults. 

26 Do you concur with that? Why is that the case? 

27 MR. GALINDO: I don't understand the question 

28 SENATOR LEWIS: The question was that the L.A . 



12 
Times ran an article back in December of 1999. They did a study 



comparing the length of incarceration for youthful offenders 
versus people in the adult population. They made a 
determination that, with the exception of murder, that longer 
sentences were meted out for youthful offenders. 

MR. GALINDO: When a ward comes to us on the 
initial hearing, the time is all ready set by a judge. 

We then look at the category of the crime and 
give him a sentence for him or her. And then staff recommends 
programs. And if we concur or see additional needs, we 
recommend those programs, and that determines the amount of time 
that the ward will complete. 

Depending on a time cut, or a time added to 
either complete that program, or because he is programming, 
there is a time cut, that's what determines his parole 
consideration hearing. 

But the time is all ready set. 

SENATOR LEWIS: Do you think on balance that the 
time sets are appropriate? 

MR. GALINDO: That has been done all ready by the 
Legislature, and that's what I work with. 

MR. PRESLEY: Senator, I think the variation is 
dependent on the conduct of the ward. If they're carrying on, 
you know, doing things that they shouldn't, attacking staff, 
won't program, things like that, then many times staff will 
recommend to the Board, say, an additional 60 days, or . 
something, because of that. 

Then, if they're doing quite well, they'll come 



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in and recommend an additional 60 day cut. So, it all sort of, 
in the end, balances out, but it's reflective of their conduct. 

SENATOR LEWIS: Have you seen the study? 

MR. PRESLEY: I don't know. I'm not familiar 
with that. 

SENATOR LEWIS: It just strikes me as odd. 
Perhaps that means that in the adult system for some of those 
crimes, the length of incarceration is not long enough. 

Any other questions, Members of the 
Committee? 

Anyone in the audience wishing to testify on 
behalf of the nominee? 

Do you have family here? 

MR. GALINDO: They're in law enforcement, and 
they could not get away to come up here. 

SENATOR LEWIS: Anyone in the audience who wishes 
to testify on behalf of the nominee? Anyone wishing to testify 
in opposition or raise concerns? 

SENATOR KNIGHT: Move it. 

SENATOR LEWIS: We have a motion. Please call 



the roll. 



Senator Lewis. 



SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR LEWIS: Aye. 



14 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

SENATOR LEWIS: We'll place this on call to 
allow the other Members to add on as well. 

MR. GALINDO: Thank you very much. 

[Thereafter, SENATORS O'CONNELL 
and BURTON added their Aye votes, 
making the final vote 5-0 for 
confirmation. ] 

SENATOR LEWIS: Mr. Gilbert Sandoval. 

MR. PRESLEY: Mr. Chairman, I think you have 
these three. They're all Youthful Offender Parole Board 
Members, and they all do relatively the same thing. 

SENATOR KNIGHT: You support them all. 

MR. PRESLEY: I support all three of them. 

MR. SANDOVAL: Good afternoon, Mr. Chair and 
Members of the Committee. 

My name is Gilbert J. Sandoval. I was appointed 
as a Member of the Youthful Offender Parole Board last year. 
I've served approximately nine months. I've been recently 
reappointed to this committee. 

I'd like to tell you a little bit about myself 
prior to the appointment by the Governor. 

I served over 23 years as a public safety 
officer. I was a police officer in Los Angeles for the Los 
Angeles School District Police Department. I attended and 
graduated from the Los Angeles County Sheriff's Academy in 1998. 

In my career as a police officer for the School 
District police, I served in a variety of assignments: as a 



15 

campus police officer; as a patrol officer; a specialized gang 
unit officer; community relations; and a training officer. 

I later promoted to the rank of detective, and I 
was assigned to the Criminal Investigative Units, and I retired 
prior to my opportunity to come to state service as a senior 
detective in Internal Affairs. 

In my career as a police officer, I completed 
many specialized and professional development courses, focusing 
on juvenile justice and juvenile delinquency issues. I 
completed those courses in child abuse, sexually exploited 
children, youth violence, and street gang issues. 

I was selected and appointed to the POST 
Commission on the specialized POST Advisory Committee. I served 
the POST Commission, acting as a special consultant on 
specialized school police issues, school violence issues, and 
safe school issues. 

I was awarded certificates from the POST 
Commission: a basic certificate; intermediate certificate, and 
the advanced certificate. 

I also attended and completed the course of study 
at USC at the School of Public Administration, the Delinquency 
Control Institute, which again focuses on delinquency and youth 
violence issues. 

I believe that my professional experience, my 
background, I think that specifically focusing on juvenile 
justice issues and youth at risk, I believe that this has 
prepared me for my role as a Board Member to the Youthful 
Offender Parole Board. 



16 

So, I would appreciate your consideration for my 
confirmation. 

Thank you. 

SENATOR LEWIS: Thank you. 

Any questions from Members of the Committee? 

SENATOR HUGHES: I'd like to say a public thank 
you for all the help that you gave me on my school safety 
legislation, and certainly showed the experience that you had 
being a school policeman. 

MR. SANDOVAL: Thank you, Senator Hughes. 

SENATOR HUGHES: Thank you very much for that. 

Along the same lines as your predecessor, I was 
wondering, if the Governor said, we have a little extra money 
we'd like to throw your way, what additional funding, if it was 
provided for treatment, where do you think there would be the 
greatest need? 

MR. SANDOVAL: Senator Hughes, you know my 
background, and you know of my concerns with youth at risk. 

And I certainly, in a perfect world, I think that 
we'll we never have enough programs for youth. 

But I think that definitely in the mental health 
arena, I definitely think that we need to continuously look at 
enhancing those programs. And obviously, your statement, never 
is enough is enough. 

But the amounts, now I would definitely support 
and I would definitely be an advocate for more resources in the 
mental health arena of the California Youth Authority. 

SENATOR HUGHES: All right. Thank you. 



17 

1 SENATOR LEWIS: Anyone in the audience wishing to 

2 testify on behalf of the nominee? 

3 MR. DINEEN: Mr. Chairman, Members of the 

4 Committee, my name is John Dineen. I am the Chief 

5 Administrative Officer of the Peace Officers Research 

6 Association of California, which represents 45,000 peace 

7 officers in California. 

8 And we strongly support the appointment of 

9 Mr. Sandoval to this position. 

10 SENATOR LEWIS: Thank you. 

11 Anyone else? 

12 MR. READ: Mr. Chairman and Members, Aaron Read. 

13 And believe it or not, PORAC's been represented ably by their 

14 Chief Administrative Officer. 

15 But I want to tell you that in my 31 years of 

16 being around government, I've rarely seen a public servant so 

17 dedicated as Sandy Sandoval. And I can't tell you how impressed 

18 I've been in having him as a friend and a mentor. And you 

19 couldn't find a better person to serve. 

20 Thank you. 

21 SENATOR LEWIS: Thank you. 

22 Anyone in the audience wishing to give testimony 

23 in opposition or raise concerns. 

24 SENATOR HUGHES: Move the nomination. 

25 SENATOR LEWIS: We have a motion. Please call 

26 the roll. 

27 SECRETARY WEBB: Senator Hughes. 

28 SENATOR HUGHES: Aye. 



18 



Hughes Aye. Senator Knight. 

Aye. 

Knight Aye. Senator O'Connell. 



SECRETARY WEBB 

SENATOR KNIGHT 

SECRETARY WEBB 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

SENATOR LEWIS: We will place this matter on 
call as well. 

[Thereafter, SENATORS O'CONNELL 
and BURTON added their Aye 
votes, making the final vote 
5-0 for confirmation.] 

SENATOR LEWIS: Next, Ute Watson. 

MS. WATSON: I'll accept any pronunciation. It's 
a little bit unusual. 

MR. PRESLEY: She is probably the best of the 
three. 

[Laughter.] 

MS. WATSON: Good afternoon, Mr. Chairman and 
Senators . 

I'm very happy to be here. As my two colleagues 
previously before me stated, I also was appointed in May, past 
year, so I have all of ten months of experience. 

I started with the Department of Corrections. 
I'm a correctional peace officer, beginning as an officer, and a 
correctional counselor. And prior to this appointment, I 
worked -- I served as a parole agent in the field, and as an 
assistant unit supervisor. 



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I was also very active in the union, CCPOA. 
Served on several boards within the institutions and with the 
parole agents. 

I feel the combination of experience of working 
inside a correctional facility/ in addition to having a number 
of years with the parole division, working in the community/ and 
keeping in mind the safety of the public, I feel this qualifies 
me. It certainly assists me in the decision making for the 
past ten months. It would qualify me for this position on the 
Youthful Offender Parole Board. 

I'm also here to answer any questions/ if you 
have them. I'm very happy that Mr. Presley is here. 

But some of the budget information/ some of those 
things, the technical things, are just a little bit new to me 
still. 

So, I'm available to any questions you have. 
Thank you. 

SENATOR LEWIS: Questions? 

Anyone in the audience wishing to testify? 

MR. NOVEY: Good afternoon, Chairman Lewis, 
Committee Members. 

My name is Don Novey, representing California 
Correctional Peace Officers Association, representing 28,000 men 
and women in the State of California that work the toughest beat 
in the state. 

There's been good candidates for the Youthful 
Offenders Parole Board selected, hopefully, today. 

Ms. Watson I've known for over 20 years. She has 



20 

more experience than most people I've ever met in dealing with 
the criminal element, most of which are in prison or Youth 
Authority. 

I think the nicest thing I can say about this 
lady is, in her own native tongue, that she's a genetti gedama; 
in other words, she's a very wonderful person. 

I wish her well, and I hope you, through your 
process here, move her on to the Senate Floor. 

Thank you. 

SENATOR HUGHES: Mr. Novey, what would you do to 
someone who tried to steal your hat? 

That's quite all right. You don't need to 
answer . 

MR. NOVEY: I would probably call somebody from 
the AARP. 

[Laughter. ] 

MS. DOUGLAS: My name is Pam Douglas, and I 
represent the Corrections Institute of America, as Executive 
Director. 

I've known Ms. Watson, worked beside her for over 
two Decades, and can certainly attest to her character. 

Thank you. 

MS. WILSON: I'm Debbie Wilson, Parole Agent II 
Specialist, and a member of CCPOA, who works the toughest beat 
in the state. 

And I've had the pleasure to work with Uta, and 
she is your best choice, and I hope that you guys all give her 
an Aye . 



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CHAIRMAN BURTON: Do you work it or walk it? 
Novey says you walk the toughest beat. 

MS. WILSON: We work it and walk it. 

CHAIRMAN BURTON: He walks it. 

MR. JOHNSON: Scott Johnson, President of the 
Parole Agents Association of California. 

I've known all Uta for many, many years, and 
she's a fine candidate to be on the Youthful Offender Parole 
Board. 

MR. STAPLETON: Michael Stapleton, Vice 
President of the Parole Agents Association of California, which 
represents 1600 parole agents, supports the appointment of Uta 
Watson. 

CHAIRMAN BURTON: Any opposition? 

SENATOR HUGHES: Move it. 

CHAIRMAN BURTON: Took care of the family 
obligations, moved by Senator Hughes. Call the roll, please. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

Thank you. Congratulations. 

We'll hold the roll open. 



22 



MS. WATSON: Thank you, everyone. 

[Thereafter, SENATOR O'CONNELL 
added his Aye vote, making the 
final vote 5-0 for confirmation. 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 4:46 P.M.] 
— ooOoo — 






23 



CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 
^2y) day of ^y-yJO^d-^ , 2000. 




izak) 

Shorthand' Reporter 






392-R 

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0HEARING 

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STATE OF CALIFORNIA 




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MAY 2 2 2000 

SAN FRANCISCO 
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Reported by: 



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STATE OF CALIFORNIA 



HEARING 



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MONDAY, APRIL 3, 2000 



1:35 P.M. 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 



MEMBERS PRESENT 



SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

SENATOR JACK 0' CONNELL 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 



ALSO PRESENT 

DOUGLAS H. BOSCO, Member 
Industrial Welfare Commission 

LYMAN HUNGERFORD 

International Association of Machinists Union 

BARRY BROAD, Member 
Industrial Welfare Commission 

HOWARD OWENS 

Consumer Federation 

Congress of California Seniors 

TOM RANKIN 

California Labor Federation 



HI 



) 



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21 



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Z5 



BILL CAMP 

Sacramento Central Labor Council 



MATT McKINNON 
Machinists Union 

5 SENATOR PATRICK JOHNSTON 

GERALD O'HARA 
California Teamsters 



RICHARD HOLOBER 

California Nurses Association 

JAMES (J. P.) JONES 

United Transportation Union 

LESLEE COLEMAN, Member 
Industrial Welfare Commission 



13 SENATOR JOHN VASCONCELLOS 

14 WILLIAM DOMBROWSKI, Member 

Industrial Welfare Commission 
15 

16 

17 



BRUCE YOUNG 

California Retailers Association 



RICHARD P. GANNON, Administrative Director 

18 Division of Workers' Compensation 

19 MARK MARCUS 
California Applicants Attorneys Association 



CARLYLE BRAKENSIEK 

California Society of Industrial Medicine and Surgery 



ROBERT BURTON, Member 

Workers Compensation Appeals Board 



LINDA MOULTON-PATTERSON, Member 

California Integrated Waste Management Board 

SENATOR WES CHESBRO 

SENATOR JOSEPH DUNN 



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IV 



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YVONNE HUNTER 

League of California Cities 

MARK THE I SEN 

Norcal Waste Systems, Inc. 



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V 
INDEX 

Page 
Proceedings 1 

Governor's Appointees: 

DOUGLAS H. BOSCO, Member 

Industrial Welfare Commission 1 

Questions by CHAIRMAN BURTON re: 

Referral of Computer Software 

People to Wage Board 1 

Same Counsel that Referred 

Stock Option 2 

Questions by SENATOR LEWIS re: 

Overtime Exemption for Computer 

Professionals 4 

Statements by CHAIRMAN BURTON re: 

Legislative Change vs. Commission 

Change to Law 5 

Questions by SENATOR LEWIS re: 

Contentious Issues before Board 6 

Effect of Tight Labor Market on 

Traditional Minimum Wage Jobs 7 

Heed to Greenspan' s Warning 8 

Questions by SENATOR HUGHES re: 

Possibility of Increasing 

Minimum Wage 8 

Timeline on Wage Board Hearings 9 



VI 



Witness in Support: 

LYMAN HUNGERFORD 

International Association of Machinists 12 

Motion to Confirm 10 

Committee Action 11 

BARRY BROAD, Member 

Industrial Welfare Commission 13 

Background and Experience 13 

Questions by CHAIRMAN BURTON re: 

Wage Board Process 13 

Questions by SENATOR HUGHES re: 

Need for Wage Board to Make Quicker 

Decisions 14 

Questions by SENATOR KNIGHT re: 

Federal Minimum Wage Currently 16 

Motion to Confirm 16 

Witnesses in Support: 

HOWARD OWENS 

Consumer Federation of California 

Congress of California Seniors 16 

TOM RANKIN 

California Labor Federation 16 

BILL CAMP 

Sacramento Central Labor Council 17 

MATT McKINNON 

Machinists Union 17 

SENATOR PATRICK JOHNSTON 17 



Vll 



GERALD O'HARA 

California Teamsters 18 

RICHARD HOLOBER 

California Nurses Association 18 

J. P. JONES 

United Transportation Union 18 

Committee Action 18 

LESLEE COLEMAN, Member 

Industrial Welfare Commission 19 

Introduction and Support by 

SENATOR JOHN VASCONCELLOS 19 

Background and Experience 20 

Questions by CHAIRMAN BURTON re: 

Sending Issue of Computer Specialists to 

Wage Board 20 

Advice of Counsel Regarding Issue 21 

Limited Authority of IWC 22 

Questions by SENATOR KNIGHT re: 

Copy of Written Opinion of Counsel 22 

Motion to Confirm 23 

Committee Action 23 

WILLIAM DOMBROWSKI, Member 

Industrial Welfare Commission 24 

Introduction and Support by 

BRUCE YOUNG, Former Assemblyman 

California Retailers Association 24 

Background and Experience 25 



via 

Questions by CHAIRMAN BURTON re: 

Commission Not Authorized to Send 

Issue of Computer Specialists to 

Wage Board 26 

Incorrect Counsel Opinion 27 

Original Proposal 28 

Motion to Confirm 29 

Questions by CHAIRMAN BURTON re: 

Ability to Continue Lobbying 29 

Committee Action 29 

RICHARD P. GANNON, Administrative Director 

Division of Workers' Compensation 29 

Introduction and Support by 

SENATOR PATRICK JOHNSTON 29 

Background and Experience 30 

Questions by SENATOR LEWIS re: 

Steps Taken to Ensure Privacy with 

New Automated Data Collection System 30 

Questions by SENATOR HUGHES re: 

Indexing Benefit Levels 32 

Questions by CHAIRMAN BURTON re: 

Nationwide Ranking in Compensation 

Benefits 32 

Cost to Bring California to 

National Average 33 

Motion to Confirm 33 



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IX 



Witnesses in Support: 

TOM RANKIN 

California Labor Federation 33 

MARK MARCUS 

California Applicant Attorneys Association 34 

CARLYLE BRAKENSIEK 

California Society of Industrial 

Medicine and Surgery 34 

ROBERT BURTON, Member 

Workers' Compensation Appeals Board 34 

Committee Action 35 

LINDA MOULTON- PATTERSON, Member 

California Integrated Waste Management Board 35 

Background and Experience 36 

Statement of Support by 

SENATOR WES CHESBRO 38 

Statement of Support by 

SENATOR JOSEPH DUNN 39 

Questions by CHAIRMAN BURTON re: 

Number of Vacancies 39 

Selection of Chairman 40 

Questions by SENATOR LEWIS re: 

Reaching AB 939 Mandate Statewide 40 

Target Rate to Reach 50 Percent 41 

Statewide Percentage Currently 41 

Progress of Orange County 41 



Questions by SENATOR HUGHES re: 

Efforts to Reduce the Stockpile of 

Waste Tires in State 42 

New and Innovative Uses for Tires 42 

Bill in Legislature to Increase 

Tire Disposal Fee 43 

Witnesses in Support: 

YVONNE HUNTER 

League of California Cities 43 

MARK THEISEN 

Norcal Waste Systems, Inc 43 

Motion to Confirm 44 

Committee Action 44 

Termination of Proceedings 45 

Certificate of Reporter 46 



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P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 

CHAIRMAN BURTON: Douglas Bosco. Doug, sorry, I 
didn't see you. Come up. 

MR. BOSCO: Do you want me to give a speech? 
CHAIRMAN BURTON: Well, you might want to say 
something. 

MR. BOSCO: Well, first of all, it's a great 
privilege to be here, returning to the Legislature in a 
different capacity. I would, of course, defer to your committee 
in seeking confirmation of my nomination to the Industrial 
Welfare Commission. 

CHAIRMAN BURTON: Have you read AB 60, the Knox 
bill? 

MR. BOSCO: Yes, I have, Senator Burton. 

CHAIRMAN BURTON: Friday, the Commission referred 
an issue to the Wage Board that, as I read the bill, is not 
authorized in the legislation. It was the issue basically of, I 
guess, for the want of a better word, computer software people, 
or whatever, who, as I understand their jobs, sometime are 
called on to work 12, 14 hours straight. And they're very high 
paid workers, and probably are not the ones that should be 
covered under the bill. 

But that, in my judgment, would be an issue for 
legislation as opposed to a Wage Board. 

Can you tell me what the thoughts were of the 
Commission when they did that? 

MR. BOSCO: Senator, the counsel to the 



Commission informed us that the question that we were addressing 
in that particular Wage Board charge was whether highly paid 
computer specialists could be granted an exemption under the 
law, and more specifically, under AB 60. 

And our counsel advised us that that was within 
the jurisdiction of the committee. 

CHAIRMAN BURTON: Is the counsel here? 

MR. BOSCO: We didn't make, of course, any 
decision on the merits of it. We did send it out to a Wage 
Board, which is comprised equally of employers and labor 
people. And at some point, they'll make a recommendation to the 
Commission. 

I don't think sending it out on a Wage Board in 
any way indicates what the Commission's opinion is on that 
subject. 

CHAIRMAN BURTON: No, but I think what it 
indicates is that they don't understand the law. 

I understand you following your counsel, and I 
guess we'll get Senator Solis to bring who ever the counsel is 
into her committee to figure out, is this the same person who 
thought they could do the stock opposition deal by wage order? 

You've got a counsel, I think, that doesn't know 
what the hell he or she's talking about and gives you bum 
advice. 

And I do not blame you guys for following the 
counsel's advice. 

MR. BOSCO: Also, I'm not sure that our counsel 
has issued any decision on the other matter that you just 



referred to, which has to do with stock options and other forms 
of compensation. 

But I do know in this particular instance, we did 
ask if it was within jurisdiction of the Commission to at least 
empanel the Wage Board. 

CHAIRMAN BURTON: I have to go through the 
problem like I did in the other, get a Leg. Counsel's opinion, 
get an AG's opinion, which we had to get on the other issue in 
order to do something. And, you know, I am going to talk to 
Senator Solis to see that she brings that counsel in either by 
subpoena or otherwise and see whether he or she has their head 
in a place where it probably shouldn't be. 

MR. BOSCO: I will say, if I could, that my 
experience on this Commission has been very brief. 

However, it does deal with extraordinarily 
contentious issues. The meetings we've had have been heavily 
attended, very vociferously fought out issues, and oftentimes 
these issues do hinge, or at least are heavily impacted by legal 
opinions. 

But I have more legal opinions coming in on our 
fax in my law office on the work of this Commission than I ever 
have on my own clients' work. And each one are heavily briefed 
items. 

CHAIRMAN BURTON: I think governments are more 
guided by, starting with the U.S. Supreme Court, and down to the 
Leg. Counsel, but up the AG, and not some private counsel who is 
either being paid by this group or paid by that group. 

But clearly, and you kind of sit there, by and 



large, as the guy as Mr. Swing Vote, by and large, on some of 
this stuff. 

But to me, the issue isn't whether these people 
should be exempt or not exempt. The issue is whether it should 
be done legislatively, which I actually would be supportive of, 
because I think people making 75 bucks an hour are not the ones 
that we're worried about being abused necessarily by their 
employers . 

So, it's more of an issue of what is proper, as 
opposed to what is philosophically the right side of it. That's 
my point. 

Clearly, and I know that there was the issue that 
Commissioner Dombrowski brought up, of what is management, and 
what isn't. And what's hands on and heads on. And that is 
something that clearly was contemplated and authorized for the 
Commission to deal with. 

The only thing I recall them being authorized to 
deal with was that issue, plus a report back on, like, 
especially down in Silicon Valley, the so-called 4-10 or flex 
time issue. So, it's not like to the merits of it, but to the 
process. 

Senator Lewis. 

SENATOR LEWIS: Recently, or up until recently, 
there was an exemption from the overtime law for certain 
computer professionals, which most recent legislation did not 
carry forward that exemption. 

What is your thought about whether or not that 
exemption should be granted? I understand that Assemblyman 



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Honda has introduced legislation to do that again. 

MR. BOSCO: I think that may be the same issue 
that Senator Burton was raising. 

I think the problem is, as often happens, is that 
the federal law does exempt these various people, and the state 
law now doesn't. And they are seeking an exemption with some 
evidence that, as you usually hear in these kind of debates, 
that our state would be unfairly prejudiced by these people 
moving elsewhere, being able to do their work on line rather 
than living in California, such things as this. 

They do tend to be highly paid people, however. 
So, the typical minimum wage issue isn't involved. 

As I say, I don't think anyone on the 
Commission — well, I'll speak for myself. 

We put it out for a Wage Board. We had two 
hearings at which this subject came up. 

I will say, of all the different issues, I don't 
think this was the most hotly contested one, either by labor or 
management . 

And we did decide to put it out for a Wage Board, 
where equal sides will be able to hear testimony throughout the 
state, and then come back to us with a recommendation. 

But I think the ultimate issue is, is it wise for 
California to conform with federal law, or maybe not. 

CHAIRMAN BURTON: No, the ultimate issue is, does 
the Commission have to obey the state law or not. And if we're 
going to change it, and I think it makes sense to change it, it 
has to be done legislatively. 



Also/ as I understand what these guys do, it 
would be very tough for them to do it on line with some of the 
problems, hands on with the computer. So, that's kind of a 
bogus thing from the industry's standpoint, because it's pretty 
tough to fix a car on line, or a computer. 

MR. BOSCO: Well, Senator, no one would have 
greater respect for the Legislature than I would. I think any 
time that the Legislature speaks on this subject or any other, 
that gives us our marching orders. 

And certainly, if any bill were in progress, or 
had passed that spoke directly to this, there would be no 
question about the decision our Commission could make. 

SENATOR LEWIS: You said that that was one of the 
least contentious issues that have been brought before you? 

MR. BOSCO: Well, I thought so, but there's been 
a lot of contentious issues. 

SENATOR LEWIS: What else is perculating right 
now? 

MR. BOSCO: Well, one issue that we have is, how 
a management position would be determined, and what the criteria 
is. For instance, is someone that works at Burger King as an 
assistant manager, should that person be exempt from overtime 
pay simply because of the title on his or her pocket? And 
various standards involved with that. That's very contentious, 
how management is defined. 

As Senator Burton pointed out, the legislation 
doesn't specifically point to that. 

Another question is whether, especially in the 



high tech industry, whether employees can be compensated by 
stock options and other bonuses in place of or in addition to 
overtime pay. 

Another issue is the question of — gosh, there's 
just about everything. You know, we have pool plasterers that 
can't finish all of their work in an eight-hour day. So, should 
their employers have to pay overtime? 

We have nurses in hospitals that work greater 
periods of time. We have people that want to work ten-hour days 
for four days and take one day off. 

I've never really seen a more contentious 
commission. 

And to be honest with you, I'm honored to be 
appointed to this, but I did not apply for this position. In 
fact, in retrospect, I think you'd have to be crazy to apply for 
it. 

[Laughter. ] 

MR. BOSCO: But those types of issues. 

SENATOR LEWIS: Just the last question. 

What effect are you witnessing right now because 
of the tight labor market in California on the traditional jobs 
that used to pay minimum wage, whether or not they still are. 

It seems like every time I go to one of my 
favorite fast food places, you see help wanted signs, and 
they're all offering starting pay above the minimum wage. 

MR. BOSCO: I think that's very true. 

And that raises another matter, and that is, this 
Commission sets the minimum wage for the state. And that issue 



8 

also has come up and is liable to be contentious. 

Our minimum wage now is $5.75 an hour, and we 
just began the process of a Wage Board to consider whether that 
should be raised. 

But certainly a prosperous economy as we now have 
drives everyone's hopes and ambitions for the future higher, and 
that includes low paid people. 

SENATOR LEWIS: Do you pay any heed to Chairman 
Greenspan's concern that significantly raising the minimum wage 
could be inflationary? 

MR. BOSCO: Well, you know, I pay heed to that as 
well as a number of other things. I mean, as a life-long 
Calif ornian, I've seen where we've gone through cycles, you 
know, of recession and good times. 

CHAIRMAN BURTON: Senator Hughes, the voice of 
reason. 

SENATOR HUGHES: Thank you. 

I was thinking about this minimum wage issue. 

If we had kept up right now with inflation, we 
would be at seven dollars an hour. 

Would that be a ridiculous amount? Because the 
cost of living, especially the cost of living is so high in our 
state. And as someone who was previously at the federal level, 
how do you look at it. 

MR. BOSCO: I can't comment on what amount would 
be best, but we did have a young boy testify at the last hearing 
that we had who pointed out that his mother was raising six 
children, including himself. And she worked at minimum wage. 



And he pointed out how even the slightest difference in that 
wage could make a huge difference in their family. 

And I afterwards, I asked him to come up and 
talked briefly with him, and Commissioner Broad and I both asked 
if he'd like to be on our Wage Board. Because it occurred to me 
that the minimum wage isn't just the issues of the people that 
are earning their livings now, but it's these type of kids, you 
know. That will affect whether he gets a good education, the 
type of home he grows up in, the type of aspirations he develops 
for the future. 

And I think when we consider minimum wage, it's 
really a much broader issue such as that. 

So, I think we are going to put him on the Wage 
Board, and that Wage Board, again, will have hearings throughout 
the state, and then come back to us with its recommendation. 
And at that point, we'll decide on the minimum wage. 

SENATOR HUGHES: What's your time line on these 
hearings, because in the mean time, people are starving. 
They're desperate. 

MR. BOSCO: I was thinking about that. I read an 
article in the Los Angeles Times that said that we're unlikely 
to make a decision in a year. And I thought, that sounds 
awfully strange. I can't imagine why it would take that 
long. 

SENATOR HUGHES: Well, they don't know anything 
but what you do. So, what is your determination? How are you 
going to, as a leader of this Commission, direct the Commission 
to try to resolve this in a timely manner? 



10 

MR. BOSCO: I would think that the Wage Boards 
could conclude their work in three or four months. 

We cannot -- the Industrial Welfare Commission 
can't make a decision until Wage Boards have met, but I would 
think they could meet in three or four months and make their 
recommendations . 

SENATOR HUGHES: Are you just telling us this, or 
are you going to tell them that? 

What I'm asking is, are you going to try to give 
them any fuel to get ahead with their job, or are you just going 
to sit back and wait until they come up with something? Do you 
feel urgency? 

MR. BOSCO: I do feel an urgency. I think 
especially at a time when everyone else is experiencing 
prosperity, that we shouldn't sit on our hands to extend it to 
probably the least fortunate people. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: No, I'd lose my environmentalist 
status . 

[Laughter. ] 

MR. BOSCO: I could go on the Board of Forestry. 
That might be a little less contentious. 

SENATOR HUGHES: Move. 

CHAIRMAN BURTON: Move by Senator Hughes. 

Did you come here solo? Got any friends, family, 
anybody? 

MR. BOSCO: I wasn't sure whether this is 



11 

something I would have wanted to bring my family to. 

[Laughter. ] 
MR. BOSCO: Could I go get them now? 
CHAIRMAN BURTON: Anybody in support? Anybody in 



opposition? 



Commission. 



Hearing none, call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Thanks. 

MR. BOSCO: Thank you very much. 

CHAIRMAN BURTON: Are you the Chair of the 



MR. BOSCO: Fortunately I'm not, Mr. Chairman. 
CHAIRMAN BURTON: Who is? 

MR. BOSCO: Mr. Dombrowski, who will be coming 
up. I'm sorry, Bill. 

CHAIRMAN BURTON: Barry Broad. 

Did you want to say something, sir. 

FROM THE AUDIENCE: Yes, Senator. 



12 

CHAIRMAN BURTON: Well, I asked if there was any 
opposition or support. 

FROM THE AUDIENCE: You went through it so fast, 
that I couldn't respond that quick, sir. 

I'm Lyman Hunger ford, from the International; 
Association of Machinists. 

CHAIRMAN BURTON: Have a seat. 

MR. HUNGERFORD: Thank you, sir. 

District 725 in the International Association of 
Machinists, I said that again. I'm a little dumbfounded here. 

We're in support of his nomination and support on 
that, sir. 

CHAIRMAN BURTON: Thank you. 

MR. HUNGERFORD: We have quite a few behind us. 
I appreciate your — 

CHAIRMAN BURTON: All of them working in the 
timber industry. 

MR. HUNGERFORD: No, sir. The Machinists Union 
covers everybody. 

CHAIRMAN BURTON: I know what the Machinists 
Union is. The timber guys like them. 

MR. HUNGERFORD: Well, we like the timber 
organization as well, sir, and we support them one hundred 
percent. 

I appreciate your indulgence, and thank you very 
much, ladies and gentlemen. 

CHAIRMAN BURTON: Thank you. 

Barry Broad. 



13 

MR. BROAD: Senator, I just have a very brief 
statement . 

This appointment means something very special to 
me. I basically spent my entire adult life representing working 
people before this Legislature and at the Industrial Welfare 
Commission. I've participated in its Wage Boards over the last 
15 years. And I understand and appreciate how important the 
responsibility is. 

The IWC is not only the place in California where 
labor law policy is debated and distilled/ but I understand that 
the job of the Industrial Welfare Commission is to ensure that 
the millions of Californians who go to work everyday to make our 
society function, who struggle to make ends meet, the people 
that ultimately create every dollar of wealth that exists in our 
society, need to be treated fairly and honestly by their 
employers. 

And that the job of the IWC is to ensure that 
employers are not subjected to competition using the labor 
market that puts them out of business because they're decent 
employers. 

It's a very serious responsibility. I pledge to 
work very hard on this Commission. I think I've worked pretty 
hard already, and that I will always do what my conscience tells 
me is right by California's working people. 

Thank you. 

CHAIRMAN BURTON: All right, you send something 
to the Wage Board, and what happens? 

MR. BROAD: You send it to the Wage Board. The 



14 

Wage Board's composed of an equal number of employer 
representatives and labor representatives with a neutral 
chairperson. They debate the issue. 

Only once in my experience has the Wage Board 
actually agreed. They usually deadlock between labor and 
management . 

Then the issue comes back to the Commission for 
public hearings and final action, either on the issue or to 
reject the issue. 

The Wage Board can, by a two-thirds vote, bind 
the Commission should it agree at that super majority level. 

CHAIRMAN BURTON: I'd assume it'd be a 
three-fourths vote if it's 2-2? Or is it 3-3, or what is the 
Wage Board. 

MR. BROAD: It's a statute says two-thirds vote. 
I don't know what that means. 

CHAIRMAN BURTON: Well if you got 2-2, it'd be 
three-quarters vote; right? 

MR. BROAD: Yes, I would assume so, yes. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: No questions. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: With all of your experience, 
what can you do to make them come to decision making sooner? 
Are you going to just sit back and wait, as we have for years 
and years and years, for them to battle each other while people 
starve? 

MR. BROAD: Well, I certainly understand that 



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because I was involved with a minimum wage initiative in 1996, 
which was put on the ballot because of the frustration with the 
Commission at that point, not taking action on the minimum 
wage. 

Fortunately or unfortunately, depending on your 
point of view, the Commission's process, its administrative 
process, is not is the quickest thing. 

And this Commission, since it's been 
reconstituted in September, held a public hearing in December on 
the minimum wage, and at our last meeting, voted to convene a 
minimum wage board, which will be appointed in the next several 
months and meet. 

The statute, however, requires that minimum wage 
increases can only occur two times a year, on July 1 or January 
1. So, if you reach a certain point, you're then six months 
slow. 

The other thing that our statute requires is that 
if the federal government raises the minimum wage, that we must 
automatically raise it to at least that level. At this point 
right now, the United States Congress is debating an increase in 
the minimum wage, so that we may, sooner or later, have some 
decision from them where they're going with the federal minimum 
wage. However, it is lower than the state minimum wage at this 
point by a considerable degree. 

I believe we're moving about as expeditiously as 
our process permits, and it's possible that we could have a 
report from the Wage Board maybe in early summer. Then we'd 
have to have a number of public hearings. 



16 

In order to have the minimum wage -- a minimum 
wage increase go into effect by January of next year, we would 
have to act sometime, I believe, in September or October at the 
very latest. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: The federal minimum wage is what 



now? 



$5.75. 



MR. BROAD: I believe it's 5.15. Ours is 



SENATOR KNIGHT: Okay, thank you. 

SENATOR O'CONNELL: Move the nomination. 

CHAIRMAN BURTON: Moved by Senator O'Connell. 

Family? 

MR. BROAD: Actually, I have them all here. My 
mother, Dee Dee Rastoff; my wife, Joan Markoff; and my children, 
Hannah and Matty. 

CHAIRMAN BURTON: Support, briefly. 

MR. OWENS: I heard briefly, Senator. 

I'm Howard Owens with the Consumer Federation of 
California and also the Congress of California Seniors. 

And Barry works with — not only with the people 
as they earn their wages but as they spend them, because he's 
been a Director on the Board of the Consumer Federation for 
quite sometime, and he's very creative there. I'm sure he's 
going to be great at this job. 

Thank you. 

MR. RANKIN: Tom Rankin, California Labor 



17 

Federation. 

I hate to lose Barry on our side of the table 
here, but he's doing a wonderful job so far in representing the 
needs of workers as a Commissioner . I think he's the best labor 
appointment we've ever had on the Commission. 

MR. CAMP: Bill Camp, with Sacramento Central 
Labor Council. 

He's a fine gentleman, and we're honored to have 
him represent the community here. 

MR. McKINNON: Matt McKinnon, Machinists Union. 

Contrary to any confusion earlier, the Machinists 
Union's only taken one position on one nominee, and that's Barry 
Broad. And we're real proud of the work he's doing. 

CHAIRMAN BURTON: He was a Woodworker Local. 

MR. McKINNON: It wasn't. Actually, that was an 
aerospace guy, a good guess. 

There's about 80 folks from Weed to Barstow, and 
Eureka to San Diego that are here, and they really came to see 
the Chairman. 

But we're here to support Barry. 

CHAIRMAN BURTON: Senator Johnston is here. 
You're here to introduce Mr. Broad? 

SENATOR JOHNSTON: I am, thank you. 

Barry Broad's known to all of you, and you're 
half way through this hearing, I suspect, or two-thirds through 
it. 

SENATOR KNIGHT: About 90 percent. 

SENATOR JOHNSTON: So, I look forward to the 



18 

vote. 

[Laughter. ] 

MR. O'HARA: Mr. Chairman, Members, Gerald 
O'Hara, California Teamsters, also looking forward to the vote. 

MR. HOLOBER: Mr. Chairman, Richard Holober, 
with the California Nurses Association. 

I've worked very closely with Barry Broad on all 
the issues that are before the IWC, minimum wage as well as 
overtime. He' probably the expert in California on those 
issues. We're in strong support. 

Thank you. 

MR. JONES: Mr. Chairman and Members, J. P. 
JONES, United Transportation Union, echo what everyone else has 
said. Strongly support Barry Broad. 

Thank you. 

CHAIRMAN BURTON: Anyone in opposition? 

Moved by Senator O'Connell. Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 



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CHAIRMAN BURTON: Congratulations, Barry. 

MR. BROAD: Thank you. 

CHAIRMAN BURTON: Senator Vasconcellos and 
Leslee Coleman. 

SENATOR VASCONCELLOS: Mr. Chairman and Members, 
I have a letter being developed, but it's not out of the 
computer yet, but I'm here to present, for the Industrial 
Welfare Commission, the appointment of Leslee Coleman, my friend 
from Silicon Valley. 

I've known Leslee for, I guess, five, six, or 
seven years. She's worked with the American Electronics 
Association, with Selectron now as International Governmental 
Affairs Coordinator, with the Silicon Valley Manufacturers 
Group, and has been educated as a social worker. 

She has a lot of talent with a good sense of 
human values and a good sense of what I think industry needs in 
Silicon Valley. We've worked together on housing, on 
transportation, on the industry working on tax efforts to enable 
our county to function well. 

She's been a partner with me at these various 
capacities in trying to help Silicon Valley develop our economy 
and prosper, and you know we have the best economy in the world 
at this point. It's beyond description and defies any kind of 
efforts. 

I believe she brings to this Commission a good, 
sound sense of what the high tech industry is becoming, and how 
it properly can be interpreted, and how the wage and hour rules 
can be effectuated in a way that balances the needs of working 



20 

people and the realities of the industry in a way that is truly 
collaborative and truly smart. And I believe she's worthy of 
your consideration and, hopefully, your favorable approval of 
this nomination. 

MS. COLEMAN: Thank you, Senator Vasconcellos . 

Good afternoon, Senator Burton and Members of the 
Committee. My name, again, is Leslee Coleman. It's an honor to 
be here. It would be a true honor to serve on this Commission. 

As John mentioned, I have a background in social 
work, and have spent a lot of years really trying to get people 
jobs, good jobs, knowing that their jobs, and jobs with dignity, 
really help them function in society. 

And I'm lucky to work for a company that provides 
about 44,000 jobs are worldwide and has had the honor of working 
with the Legislature and with John to protect workers and also 
protect the economy. 

It would be a true honor to serve with my fellow 
Commissioners on this Commission. 

CHAIRMAN BURTON: We had a discussion about the 
stock option deal, which clearly, according to the Attorney 
General and Leg. Counsel, that that was outside the purview of 
the Commission. 

Then, unbeknownst to me, they were going to 
discuss another issue, which was the issue of the, at least in 
my language, the computer service people, sending that to a Wage 
Board, which again, and I guess we'll have to get an opinion on 
that, is clearly outside the purview of the Commission. It's 
something we should deal with and should be dealt with in a 



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statute. 

But I guess once your attorney, and we'll discuss 
that with Chairman Dombrowski, that if the attorney says — did 
the attorney say that it's within your power to administratively 
deal with that issue? 

MS. COLEMAN: That was our understanding. 

CHAIRMAN BURTON: Did he cite anything? 

MS. COLEMAN: When we asked if it was okay for us 
to go forward with doing a Wage Board, she said that in her 
opinion that that was appropriate. 

I think what I'm learning here as part of the 
take-away, I'm not a lawyer nor a lobbyist up here. So, there's 
some learning process, I think, with this. But perhaps the 
take-away is that because the law is new, and there's a lot of 
uncertainty about it, perhaps as Commissioners it'd be prudent 
for us to seek some counsel from your office and from other 
interested parties as we go forward. 

CHAIRMAN BURTON: First of all, if you had an 
attorney who knew what the hell she was doing, she could have 
read the law and told you. 

I don't think you want to seek it from my office, 
or Senator Lewis', or anybody, because we all would have our 
bias . 

But, clearly like the Leg. Counsel, who's just 
there to answer questions, up, down and sideways, and the 
Attorney General, and I will raise this with the Chairman. 

But I mean, I'd just like to know under what part 
of the bill when again, and we had the conversation, that 



22 

clearly we gave the authority to the Commission to figure out 
what was hands-on and what made a manager and what didn't. 

And basically the concept that I thought we had 
at least agreed on working through the bill was that the 
manager, that if a person was a manager with managerial duties, 
the fact he did some other hands-on stuff when the occasion 
called didn't make you less of a manager. 

But if you're really somebody, you know, a stock 
boy or something like that, and they tell you to go read the 
time cards once a month, that that, in my mind, didn't make you 
a manager. 

Then, at the suggestion of Senator Vasconcellos, 
we authorized the Commission to report back how the 4-10s flex 
time were working to see then if the Legislature wanted to 
basically, you know, expand that coverage. 

But it was very limited as to what we gave the 
IWC the authority to do, the reason for that being, we were not 
happy with the IWC, and that's why they went to an overtime 
bill. 

Senator Lewis. 

SENATOR LEWIS: No questions. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: I was going to ask one question. 

Everybody has indicated that the counsel has 
given an opinion as to their interpretation and suggested it was 
within your purview to provide the exemptions. 

Do you have a copy of the written opinion from 
the counsel giving you that to you? 



23 

MS. COLEMAN: She gave it verbally. And she 
didn't — what she gave us verbally was that she thought it was 
within our purview to appoint a Wage Board. 

SENATOR KNIGHT: So, there was no written 
opinion? 

MS. COLEMAN: Not that I'm aware of. 

CHAIRMAN BURTON: Did you bring any family? 

MS. COLEMAN: Friends and family aren't here. 
They're here in spirit. 

SENATOR HUGHES: I move it. 

CHAIRMAN BURTON: Witnesses in support? 
Witnesses in opposition? 

Moved by Senator Hughes. Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 
Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SENATOR KNIGHT: Aye. 

CHAIRMAN BURTON: Senator Knight Aye. 

SECRETARY WEBB: Burton Aye. Senator Knight Aye. 
Five to zero. 

CHAIRMAN BURTON: Thanks, Leslee. 
Congratulations . 



24 

MS. COLEMAN: Thank you very much. 

MR. DOMBROWSKI: I've only been Chairman for 
about 72 hours. 

[Laughter. ] 

CHAIRMAN BURTON: Mr. Young, are you here to 
introduce him? Former Member's courtesy. 

MR. YOUNG: Thank you. 

Mr. Chairman and Members, thank you very much. 
Bruce Young, representing the California Retailers Association, 
here to introduce Bill Dombrowski. 

I ' ve known him for about ten years and worked for 
him for the last six years. I can think of many reasons why he 
should be on this Commission. Certainly from a professional 
standpoint, he's fair and probably the most pragmatic person 
I've ever met. 

I think the politics of it, even though he's 
certainly here representing the business interests, as you know, 
we were one of the few business groups that supported AB 60. 

But I'd also like to appeal with you on a 
personal basis, because by the act of confirmation, I have the 
best of all worlds. I can never buy my boss breakfast, lunch or 
dinner again, or buy him a holiday gift. 

So, with all those, I ask you to approve him. 

CHAIRMAN BURTON: And I would hope you can't 
appear before the Commission. 

MR. YOUNG: Absolutely. 

MR. DOMBROWSKI: Like he ever did buy me 
anything. 



25 

[Laughter. ] 

MR. DOMBROWSKI: Thank you, Senators. 

Just a couple of brief comments. We were one of 
the few business groups to support AB 60, and realized it was 
going to lead to a lot of contentious debate at the IWC, which 
we are seeing. But clearly, it does set some pretty solid 
parameters about what the IWC can and can't do. We are working 
through those as we go through this. 

I think I do bring a reputation with the various 
parties who come before the Commission of being someone they can 
deal with, and we have done that on a number of other issues in 
front of the Legislature. 

I think the way, if you want to just talk about 
the manager duties, what we have talked about is, is there a way 
for us to make sure that managers who are doing these incidental 
nonmanagerial tasks are still no less manager. We put language 
out there about a month ago. We had a hearing last Friday. It 
was very contentious, a lot of viewpoints expressed. We're 
going to have to go back. We'll talk to labor; we'll talk to 
the other parties and see if we can come to some agreement on 
it. I don't know if we will. 

But that is kind of the example, I think, and 
what we're going to have to do at the IWC as we go through this. 
And so far, I am amazingly pleased by how we have been able to 
come to agreements on various issues that have come up, and look 
forward to working with the other Commissioners on that, with 
your approval . 

CHAIRMAN BURTON: Well again, on the managerial 



26 

thing, I think at least it was clear to me from our discussions, 
and I'm not saying what would be clear to you, Bill, is that if 
somebody had managerial duties, and then did some hands-on work, 
it did not make them less of a manager. 

What our concern is, you take somebody that 
clearly is like a stockboy, flipping burgers, or what, and you 
have them do a couple things, and all of a sudden, they become a 
manager. You start with somebody with managerial duties, and I 
gave examples of stuff that I know, and clearly if they have to 
do other stuff, either as part of their duties or to just make 
things, you know, some manager helps an old lady carry the bags 
out to her car, all of a sudden doesn't make them a clerk. 

But I want to get into, and I think you know what 
that issue is, but the issue of how someone, and even Senator 
Lewis when he commented said that those people were once exempt 
from the eight-hour day, and these are the computer repair 
people, for want of a better word, and that we would have to, 
which I think, as I said, we should because I think $50, $60, 
$70 an hour guys, they're not necessarily the ones that I'm 
concerned about. 

But how the person could authorize to send it to 
the Wage Board, because it goes to the Wage Board, that means 
you've got jurisdiction. If it comes back to you with nothing, 
that means you've got jurisdiction to vote. 

And I would really like, this isn't the first 
time that the counsel for the Commission has not either read the 
law or understood the law. I'm very interested in knowing her 
background, knowing what she thinks about when she issues these 



27 

opinions, and on what basis she gives them. 

Because to get into a beef over something that I 
think would go through the Legislature in fairly quick order, 
and probably with a more or less unanimous vote, seems kind of 
stupid to me. 

MR. DOMBROWSKI: I totally agree with you. 

CHAIRMAN BURTON: Strike "kind of." 

MR. DOMBROWSKI: Totally agree with you, and 
personally would love to see the Legislature take the issue off 
our table. 

CHAIRMAN BURTON: It ain't on your table. By 
law, it can't be on your table. 

MR. DOMBROWSKI: We'd love to see the Legislature 
do this. 

The counsel advised us, and I can't remember the 
exact sections of the bill. We can get them for you. But at 
the previous meeting, the subject came up, and she gave the 
opinion, citing a section, that we could form Wage Boards on it. 
And then subsequently, at this last Friday meeting, reaffirmed 
that. 

CHAIRMAN BURTON: She's the same one that thought 
you could deal with the other stuff. 

MR. DOMBROWSKI: Same one. 

CHAIRMAN BURTON: The AG said you can't. 

MR. DOMBROWSKI: Same one. 

CHAIRMAN BURTON: So, you may want to fire the 
lawyer. 

MR. DOMBROWSKI: I haven't had a chance to find 



28 

out what my authority is as Chairman, but we would be looking, I 
guess . 

CHAIRMAN BURTON: You take one vote, I'll get you 
two others. 

MR. DOMBROWSKI: Okay. 

I think we will have to go back and obviously 
look at that, and get some legal advice, and find out where we 
have gone, and get back on track. 

CHAIRMAN BURTON: Because we were sitting there. 
It was you, and Bruce, and Rankin, and, I think, Vasco, and 
maybe Dee Dee Alpert, myself. We knew what was in it. We knew 
what we put in and what we didn't, and I don't remember this 
one . 

MR. DOMBROWSKI: This one never came up. Came 
out of left field. 

CHAIRMAN BURTON: It sure did. 

Who's proposal was it; do you remember? 

MR. DOMBROWSKI: It was the computer programmers, 
the temporary agencies that came forward a couple months ago, 
and they basically said they had never heard of AB 60 and 
weren't aware of what it did to them last year. 

CHAIRMAN BURTON: Senator Lewis. Senator Hughes. 
Senator O'Connell. Senator Knight. 

Got any friends here besides Bruce? 

MR. DOMBROWSKI: Like Mr. Bosco said, I wasn't 
sure if I wanted to bring my wife and family. 

CHAIRMAN BURTON: Witnesses in support? 
Witnesses in opposition? 



29 

SENATOR HUGHES: Move it. 

CHAIRMAN BURTON: We do have a letter, actually. 

What does this do to you now? Are you allowed to 
lobby and do this, or do you have to step back and make him do 
all the work or what? 

MR. DOMBROWSKI: No, I can still lobby. I just 
can't have people buy me anything over ten dollars. I'm subject 
to the same restrictions as you and staff and others, but I can 
still lobby, just as Barry can still lobby. 

CHAIRMAN BURTON: Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations, Bill. 

MR. DOMBROWSKI: Thank you. 

CHAIRMAN BURTON: Richard P. Gannon, 
Administrative Director, Division of Workers Comp. 

SENATOR JOHNSTON: I'm here on time to say that 
Mr. Gannon is a steady hand, knowledgeable in the Workers' 
Compensation system. We would be wise to confirm him. 



30 

Thank you. 

MR. GANNON: Thank you, Senator. 

Thank you. It's my pleasure to be here, and my 
pleasure to be appointed and considered for confirmation as the 
Administrative Director of the Division of Workers Compensation. 

It's a very interesting agency. We have a number 
of issues that we need to deal with, and I anticipate the 
opportunity to be involved in that. 

My background very briefly is, things that were 
important in my life, I guess I'll start with the Marine Corps. 
I was a representative of the Operating Engineers in Southern 
California for 20 years, the last 11 of it was specializing in 
apprenticeship training. 

Through the efforts of Jack Henning of the State 
Federation of Labor, I was appointed by Governor Wilson to the 
Workers Compensation Appeals Board as a labor member, and have 
served there since 1992. And my term ended in April of last 
year, and in June I was appointed as the Administrative 
Director. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: With the use of the new automated 
data collection system, what steps are you taking to ensure the 
privacy of employers and employees? 

MR. GANNON: Well, you can separate the 
information that the Division has into two classes. One is 
information covered by the Public Records Act of the Government 
Code, which is contained — which is the information that's 
contained in the case files where a dispute exists, and somebody 



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files an application for adjudication. This is a court record. 

The administrative data on all claims, which is 
required by the Workers Comp. legislation and Labor Code 138.6, 
which was enacted in '93, has the objectives of helping us to 
figure out better ways of running the system and to provide a 
bank of data for the Legislature and policy makers to make 
decisions. 

Number one, we're protecting it very adequately 
from hackers; meet or exceed the industry standards. It's one 
of the best in the nation for that. 

Protecting from legal assault, it's — the big 
issue there is individually identifiable information. Again, 
this is the information that is received by not the court 
records, but the information received by the information system 
from a variety of claims, insurance companies and self-insured 
employers. There is — public access to this information is 
held and is allowed out only with very specific exceptions. The 
Division itself may use it to manage the Division. Specific 
agencies of the state may use it: the Division of Occupational 
Safety and Health, the Division of Labor Standards Research, 
Division of Health Services. These are outlined in the 
legislation and they're used for specifically stated purposes. 

The only other opportunity is for bona fide 
statistical research. And there are very stringent rules on who 
qualifies, how it can be done. And there are requirements that 
they have to assure us that are not going to use it for any 
other way of making it out. 

There's some confusion in this because there's a 



32 

journalistic exception which only applies to the court records. 
And these are public records, and therefore, under the Public 
Records Act, the journalistic exception was put into 138.7 in 
and amendment two years ago, I believe. 

But it does not apply to the information that we 
receive from the claims managers. 

SENATOR LEWIS: No more questions. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: What's your position in indexing 
the workers compensation benefit levels in order to keep pace 
with the increased cost of living? 

MR. GANNON: I can see -- I could say what the 
advantages are to that. It would allow a regular basis for 
increasing them. 

As of right now, I think most people would agree, 
since the last increase in 1996, that the benefits — temporary 
disability, indemnity benefits — have fallen behind. And 
there is an agreement they should be raised; it's just how 
much. 

Once a debate has occurred and legislation would 
be changed to allow indexing, it would establish what the proper 
ratio would be between benefits and the state average weekly 
wage. Then from that point on, that would control the level of 
indemnity benefits on the temporary indemnity, the type when the 
person is often healing; not the permanent disability benefits. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Where do we rank in the nation 
on workers comp. benefits? 



33 



MR. GANNON: We are in the lower — in the 
forties. We're on the lower end of maximum — 

CHAIRMAN BURTON: We're about where we are in 
public education? 

MR. GANNON: I don't have any expertise in that 



one. 



nation? 



CHAIRMAN BURTON: We're about fortieth in the 



MR. GANNON: Yeah. 

CHAIRMAN BURTON: What would it cost to bring us 
up? Do you have any idea what it would be, a benefit increase, 
to bring us up to the national average? 

MR. GANNON: No, that's being widely debated 
right now in Senator Johnston's committee, or the committee 
hearings that are going on. 

But the ranking, well, I don't know exactly what 
it would cost, no. 

SENATOR HUGHES: Move the nomination. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Did you bring any family? 

MR. GANNON: Yes, my wife Susan is here with me, 
and a couple of our staff came over to see what would happen. 

CHAIRMAN BURTON: Witnesses in support, briefly. 

MR. RANKIN: Tom Rankin, California Labor 
Federation. 

Dick is a very good man for the job. He's got 
the experience in the union, and he's had a number of years on 
the Workers Comp. Appeals Board, during which he failed to 



34 

mention he went to law school because he got so into the workers 
comp. issue. 

We're very happy with this choice. 

MR. MARCUS: Mark Marcus, California Applicant 
Attorneys Association. 

I've had the pleasure for years to read 
Mr. Gannon's decisions, because I represent injured workers. He 
has a fine knowledge of the system. He's a great choice. We 
support him. 

MR. BRAKENSIEK: Carl Brakensiek, on behalf of 
the California Society of Industrial Medicine and Surgery. 

We are strongly in support of Mr. Gannon. As a 
Commissioner, he has written a number of very scholarly 
opinions. Since he has been the A.D., he has been a consensus 
builder. He meets with all interest groups, and he's attempting 
to move the system forward. 

We think he's the right person for the job. 

MR. BURTON: I'm Robert Burton. 

SENATOR HUGHES: Do we need to hear from this 



witness? 



[Laughter. ] 
CHAIRMAN BURTON: He traveled a long way to be 



here 



MR. BURTON: I'm Robert Burton. I replaced 
Mr. Gannon, who was a class human being. I have worked with 
other people from the workers compensation field, from the labor 
movement, and nobody has matched him. He is an absolute 
gentleman, and certainly worthy of your confirmation. 



35 

CHAIRMAN BURTON: I'm sure Al Boardman's happy to 
hear that. 

SENATOR HUGHES: Move. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Opposition? 

Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

MR. GANNON: Thank you. 

CHAIRMAN BURTON: Linda Moulton-Patterson, 
Member, California Integrated Waste Management Board. 

MS. MOULTON-PATTERSON: Good afternoon, 
Mr. Chairman and Members of the Committee. 

I'm very pleased to be Governor Davis' first 
appointment to the Integrated Waste — 

CHAIRMAN BURTON: Let's hope you're not his last. 
You're still short some members, aren't you? 

MS. MOULTON-PATTERSON: Yes. 



36 

And I am very honored and pleased to be here 
before you today for my confirmation hearing. 

I would like to, so I don't forget, just take the 
time to introduce my husband, Jerry Patterson, who's here to 
support me, and friends, Ron and Bonnie Bruce. 

I have a very brief statement, if I may 
continue. 

Since I was appointed to the Board last August as 
the member representing the public, I worked hard to promote the 
Board's efforts to increase waste diversion, stimulate new 
markets for recycled materials, and ensure a clean and safe 
environment. It's been a challenging seven months, but a deeply 
rewarding experience for me. 

As I outlined in my brief statement of goals, I 
have focused on meetings with our many stakeholders to gain 
their perspectives and learn all of the complexities of waste 
diversion and solid waste management. 

During the next year, I hope to use the 
information I gathered to help ensure that every city and county 
in California fully achieves the goals of AB 939 within the 
shortest time possible. 

Californians traditionally are strong supporters 
of the environment, and recycling is no exception. Since 1989, 
the statewide diversion rate has soared from an estimated 10 
percent to 37 percent in 1999. In the last year alone, the 
amount of materials diverted from landfills jumped by 20 
percent. With continued Board efforts to help local governments 
identify and implement the best programs possible, and through 



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ongoing public education efforts, I believe the 50 percent 
mandate that was once thought impossible is within our reach. 

Because of my background as an educator and local 
elected official, many of my goals focus on these two important 
areas. Cities and counties are responsible for implementing 
waste diversion programs to reach their AB 939 mandates. 

As a former mayor and council member, I recall 
all too well the frustrations I sometimes had in dealing with 
state agencies that did not always understand the difficulties 
we faced. 

My goal is to establish win-win relationships 
with our partners at the local level and to be their advocate on 
the Board, and do everything I can to help them cut their trash 
in half. 

As an educator, I was a teacher, administrator, 
and school board member, so I know first-hand how important and 
valuable education is. That's why I'm pleased to inform you 
today that Secretary Hickox has approved my proposal to 
establish a new Office of Education at the Waste Board to 
promote environmental education for all of the boards and 
departments within Cal EPA. As the only Cal EPA entity with an 
education mandate, we have developed and implemented a 
nationally acclaimed recycling education curriculum program for 
K through 12 students statewide. Our goal now is to take our 
expertise and help other boards and departments develop and 
enhance environmental education programs. 

Some of you may recall that Senator Roberti, with 
whom I now serve on the Waste Board, appointed me to the 



38 

California Coastal Commission in 1991. I deeply appreciated 
that opportunity to serve the people of California, and I'm 
equally honored to have the opportunity to serve today on the 
Integrated Waste Management Board. 

I ask for your support and thank you very much. 

CHAIRMAN BURTON: Senator Chesbro. 

SENATOR CHESBRO: Yes, Mr. Chairman and Members, 
it gives me a great deal of pleasure here today to offer my 
words of support for Linda Moulton-Patterson. I think the 
Governor made a terrific appointment. 

As you know, I represented the Senate on the 
Waste Board for eight years. I was — although there is no 
designated slot for a local elected official, I did bring both 
strong support for the mandate for AB 939 in reducing the 
state's waste, as well as a local government perspective. 

That perspective has been lacking on the Board, 
even though I certainly think Senator Roberti was a great 
appointment, and I'm pleased that the Governor saw that that was 
a gap and filled it with somebody who is both strongly committed 
with a good track record of environmental protection, but also 
an understanding of the needs of local government, which AB 939, 
after all, placed most of the responsibility for reducing the 
state's waste stream on local governments. And it's a 
partnership between local government and the state that has 
gotten us to the point that we have with waste reduction in 
California. 

And I think that Linda Moulton-Patterson will do 
a terrific job of continuing that partnership and giving the 



39 

Board credibility with local governments. 

So, I'm happy to lend her my full and 
whole-hearted support. 

CHAIRMAN BURTON: Senator Dunn. 

SENATOR DUNN: Thank you, Senator. 

I am sure there have been many great comments 
mentioned about this individual. I just wanted to let the 
Committee know, this is an individual who I have known for many, 
many, many years. We've fought many battles together in Orange 
County. And simply put, I recommend her highly, highly for this 
position. She will be a tremendous asset to the entire State of 
California. 

CHAIRMAN BURTON: Thanks. 

How many vacancies are there, do you know, on the 
Board still? 

MS. MOULTON- PATTERSON: Yes. There are two; one 
public and one environmental slot. 

CHAIRMAN BURTON: And there are how many members 
on the Board? 

MS. MOULTON- PATTERS ON: A total six, four 
presently and two vacancies. 

CHAIRMAN BURTON: So, you're one over the quorum. 

MS. MOULTON- PATTERS ON: We need four votes for 
everything. 

CHAIRMAN BURTON: That's right. Anybody sick, 
you can't do business? 

MS. MOULTON- PATTERSON: That's right. 

CHAIRMAN BURTON: The environmental slot's been 



40 

vacant since January of '99. How about the public? 

MS. MOULTON- PATTERSON: It just became vacant the 
end of February. Well/ actually, January 1st, and then the 
member for -- I guess he's allowed to stay on two months. 

So, we've had our first meeting as four members. 

CHAIRMAN BURTON: He can't stay on until they're 
replaced? 

MS. SABELHAUS: They stay on for just 60 days. 

CHAIRMAN BURTON: Are all the appointees Governor 
Davis', except for the legislative ones? 

MS. MOULTON- PATTERS ON: There's Senator Roberti, 
your appointee, and Dan Eaton, our Chairman, who's Assembly, and 
then myself, and then the industry position, Mr. Jones, was just 
reappointed by Governor Davis just on the last day, I believe, 
that he could be, on February 28th. 

CHAIRMAN BURTON: How is the Chairman picked? 
Are they elected by the Board or what? 

MS. MOULTON- PATTERS ON: Yes, he was elected by 
the majority of the Board before I became a member. 

CHAIRMAN BURTON: Thank you. 

Senator Lewis. 

SENATOR LEWIS: You'd mentioned that you are 
fairly confident that we're going to reach the 50 percent 
diversion mandate. When do you anticipate that would be 
realized? 

MS. MOULTON-PATTERSON: Well, many of the 
cities — at the end of this year, you know, is our timeline to 
make 50 percent. Now, obviously, all of them aren't going to. 



41 

And with Senate Bill 1066, it does give us the option of 
granting extensions or making some alternative arrangements for 
unique situations. 

We've had workshops up and down the state to let 
cities and counties know about that. 

SENATOR LEWIS: Do you have a target year where 
you think that the average rate in California will be 50 
percent? 

MS. MOULTON- PATTERSON: Well, we hope within the 
next couple of years. 

I might say, Senator, that one of the things that 
I as a Board member, we are looking at the 50 percent, but we're 
also really looking at the programs that each city and county 
have, because some of the cities might be off a number or two, 
but they have great programs and are making good faith efforts. 
I think that's very important we take that into consideration. 

SENATOR LEWIS: What percent are we at statewide 
right now? 

MS. MOULTON- PATTERSON: We're at 37 percent, up 
from — in 1990, it was 10 percent, and we've gone up to 37 
percent. 

So, we've made great progress, and we're hoping 
to make that 50 percent statewide in the next year or so. 

SENATOR LEWIS: How is Orange County stacking up? 

MS. MOULTON-PATTERSON: Orange County is doing 
very well. I believe overall we're at 48 percent. I know my 
city, Huntington Beach, had a new base year diversion rate 
study, and they're now at 63 percent. Fountain Valley is at 47 



42 

percent. They've worked very hard as a group and have a good 
program. 

SENATOR HUGHES: The tire dumping problem, how is 
your Board dealing with reducing the stockpile of waste tires in 
our state? 

MS. MOULTON- PATTERSON: Well, we're certainly 
very, very concerned because it's such a safety and health 
issue. And there's 30 million tires a year that go into the — 
that are waste tires. 

About 18 million of those are going to 
alternative uses, and we're really encouraging and giving grants 
and working with different jurisdictions and businesses to help 
make these possible, such as the rubberized asphalt that we're 
using on playgrounds, and many other things that I would have 
never imagined that they can use tires. 

SENATOR HUGHES: Are there any new innovative 
uses of these tires? There's so many of them around. 

Could you tell us if anyone's come before the 
Board with any new innovative uses of these ti'res? 

MS. MOULTON- PATTERSON: Since I have been there, 
there have been — you know, the rubberized asphalt is certainly 
one. 

Then I visited, down in the Central Valley, a 
generator that burnt tires as energy and produced energy. 
Unfortunately, the Modesto energy plant closed down, which did 
take care of all the tires that were left over at the Westly 
tire fire, and they provided energy to the Bay Area. 

So, we're always looking, and getting grants, 



43 

working with businesses to encourage those industries because 
they're very, very important. 

SENATOR HUGHES: There's a bill before us now to 
increase the tire disposal fee to two dollars. How will this 
additional money be used if it's approved? 

MS. MOULTON- PATTERSON: Well, we are certainly in 
support of that bill, because at this time, we only have five 
inspectors statewide, and there are many illegal tire piles 
around. 

So, we would certainly use the money to increase 
inspectors, for outreach to counties and cities, for education, 
to work with businesses. There are many ways that we could use 
that. It certainly affects public safety, in my opinion. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: You introduced your family and 
friends. 

Any witnesses in support? 

MS. HUNTER: Mr. Chairman and Members, Yvonne 
Hunter with the League of California Cities. 

Senator Chesbro gave my testimony, so I will 
concur with all of that. 

We think Ms. Moulton-Patterson is uniquely 
qualified to serve on the Waste Board. She's been accessible, 
thoughtful, and we look forward to working with her in the 
future. 

Thank you. 

MR. THEISEN: Mr. Chairman and Members of the 
Committee, good afternoon. Mark Theisen with the Gualco Group 



44 

on behalf of Norcal Waste Systems. 

Norcal's President and CEO communicated his 
support and that of the company's in a letter to you, 
Mr. Chairman, dated March 7th for the nomination of 
Ms. Moulton-Patterson. 

I'm here just to echo the comments that Senator 
Chesbro, Senator Dunn, and of course the lobbyist for the League 
of California Cities, Ms. Hunter. 

We urge you to confirm her appointment. 

Thank you. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Anybody in opposition? 

Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. 

CHAIRMAN BURTON: All Members on the roll will 
be recorded Aye. 

[Thereupon SENATOR O'CONNELL 
was recorded as an Aye vote, 
making the final vote 5-0 



45 



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for confirmation.] 
MS. MOULTON- PATTERSON: Thank you very much 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 2:41 P.M.] 
— ooOoo — 



46 
CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 



y day of (A^uJ. / 2000. 





:zak 

"Shorthand/Reporter 




393-R 

Additional copies of this publication may be purchased for $3.00 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1 020 N Street, Room B-53 

Sacramento, CA 95814 

(916)327-2155 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 393-R when ordering. 



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HEARING 



SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUMENTS DEPT. 
MAY 2 2 2000 

SAN FRANCISCO 
PUBLIC LIBRARY 



U*yiil< Jrv '' c 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 

MONDAY, APRIL 10,2000 
1:36 P.M. 



394-R 



SENATE RULES COMMITTEE 
STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 

ROOM 113 

SACRAMENTO, CALIFORNIA 



MONDAY, APRIL 10, 2000 
1:36 P.M. 



Reported by 



Evelyn J. Mizak 
Shorthand Reporter 



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APPEARANCES 



MEMBERS PRESENT 



SENATOR JOHN BURTON, Chair 
SENATOR JOHN LEWIS, Vice Chair 
SENATOR JOE BACA 
SENATOR TERESA HUGHES 
SENATOR WILLIAM KNIGHT 



SENATOR JACK O'CONNELL 



MEMBERS ABSENT 



STAFF PRESENT 



GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

ALSO PRESENT 

DIANA M. BONTA, Ph.D., Director 
Health Services Department 

SENATOR DEBORAH ORTIZ 

MARIE KUFFNER, Physician 
California Medical Association 

JUSTIN MALAN 

Environmental Health Directors Association 

CARMELA CASTELLANO, Chief Executive Officer 
California Primary Care Association 



Ill 



DENISE MARTIN, President 

California Association of Public Hospitals and 
Health Systems 

BETTE HINTON, M.D. 

Yolo County Health Officer 

California Conference of Local Health Officers 

ART NALDOZA 
La Cooperativa 

MICHAEL J. ARNOLD 

California Children's Hospital Association 

California Dialysis Council 

California Clinical Laboratory Association 

JOHN VALENCIA 

California and United States Hispanic Chambers of Commerce 

TERRI COWGER 

California Childrren's Lobby 

Hemophilia Council of California 

DOUG HITCHCOCK 

California Healthcare Association 

FRANK RAMIREZ 
CAFE de California 
American GI Forum 

TERRI THOMAS 

Women's Appointment Project 

RITA SCARDACI, Director of Public Health 

Plumas County 

President, County Health Executives Association 

STEVE BAKER 

California Association of Professional Scientists 

BETH CAPELL 

Service Employees International Union 

SHERYL L. GRANZELLA, Member 
California Horse Racing Board 



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IV 



LINDA MUIR 

Los Angeles Turf Club 

MARIE G. MORETTI, Member 
California Horse Racing Board 



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INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

DIANA M. BONTA, R.N., Dr. P.H., Director 

Department of Health Services 1 

Introduction and Support by 

SENATOR DEBORAH ORTIZ 1 

Background and Experience 3 

Questions by CHAIRMAN BURTON re: 

Reducing Drop Off Rate of 

Medi-Cal Recipients 5 

Inadequate Provider Rates 7 

Medi-Cal Linked to Welfare 9 

DBCP Standard in Drinking Water 10 

Formula for Determining Efficacy of 

Standards 13 

Questions by SENATOR LEWIS re: 

Correlation between Increase in Life 

Expectancy and Cancer Rate 14 

Difference in Prices between Over-the- 

Counter Devices and Price Paid by 

Medi-Cal 14 

Expectations if Governor's Budget Is 

Approved for Additional Money and Staff 

For Medi-Cal Fraud 15 

Investigation of Fountainview Company 16 



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Questions by SENATOR HUGHES re: 

Expansion of Medi-Cal Coverage for 

Former Foster Care Youth during 

Transition to Adulthood 18 

Need to Communicate with Different 

State Agencies 19 

Motion to Confirm 20 

Questions by CHAIRMAN BURTON re: 

Measures to Improve Quality of Care at 

Bars tow Veterans ' Home 20 

Monitoring Compliance with Nursing 

Home Wage Pass-Through 21 

Types of Cancers 21 

Introduction of Family 22 

Witnesses in Support: 

MARIE KUFFNER, M.D. 

California Medical Association 22 

JUSTIN MALAN 

Environmental Health Directors 23 

CARMELA CASTELLANO, Chief Executive Officer 

California Primary Care Association 23 

DENISE MARTIN, President 

California Association of Public Hospitals and 

Health Systems 23 

BETTE HINTON, M.D. 

Yolo County Health Officer 

California Conference of Local Health Officers 24 

ART NALDOZA 

La Cooperativa 24 



Vll 



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MICHAEL ARNOLD 

California Children's Hospital Association 

California Dialysis Council 

California Clinical Laboratory Association 25 

JOHN VALENCIA 

California and U.S. Hispanic Chambers of Commerce ....25 

TERRI COWGER 

California Children's Lobby 

Hemophilia Council of California 25 

DOUG HITCHCOCK 

California Healthcare Association 25 

FRANK RAMIREZ 

CAFE de California 

American GI Forum 25 

TERRI THOMAS 

Women's Appointment Project 25 

MARTHA TORRES -MONTOYA 

Hispanic Women' s Health Association 25 

RITA SCARDACI, Director of Public Health 

Plumas County 

President, County Health Executives Association 26 

STEVE BAKER 

California Association of Professional Scientists .... 26 

BETH CAPELL 

Service Employees International Union 26 

Committee Action 27 

SHERYL L. GRANZELLA, Member 

California Horse Racing Board 27 

Introduction by CHAIRMAN BURTON 27 

Background and Experience 27 

Questions by SENATOR KNIGHT re: 

Plans to Make More People Aware 

Of Horse Racing in California 29 



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Questions by CHAIRMAN BURTON re: 

Labrook's Operations 29 

Motion to Confirm 3 

Introduction of Family 3 

Witness in Support: 

LINDA MUIR 

Los Angeles Turf Club 3 

Committee Action 31 

MARIE G. MORETTI, Member 

California Horse Racing Board 31 

Background and Experience 31 

Comments by SENATOR KNIGHT re: 

Women Jockeys 33 

Motion to Confirm 33 

Committee Action 34 

Termination of Proceedings 34 

Certificate of Reporter 35 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: Senator Ortiz. 

SENATOR ORTIZ: Thank you, Mr. President and 
Members, particularly for taking us out of order. I do have to 
be in committee. 

It's my honor — 

CHAIRMAN BURTON: May I say this? 

SENATOR ORTIZ: Three minutes. 

CHAIRMAN BURTON: No, three bills I've got in 
your committee. Take all the time you want. 

SENATOR ORTIZ: All right. 

Thank you, Mr. President. It really is my honor 
to be here today, introducing Dr. Diana Bonta, who comes to us 
as the Director of Health Services but from the City of Long 
Beach. She served as the Director of the Department of Health 
and Human Services. 

In that capacity, she was responsible for the 
management of public health operations and social service 
programs, public health issues, which are very dear to my heart. 
She led a number of innovative programs, such as the Proud 
Fathers of the Hood, which reaches out to at-risk young 
fathers-to-be, and educates them on how to be good parents. 

She also was very successful in initiating the 
Community Challenge Grant Program, which provides teen pregnancy 
prevention services and family preservation programs. Clearly, 
she understood that that was a key to a strong and healthy 
community, and safe children, and functional families. 



She is particularly unique because she has 
knowledge of programs on the local level. This is something 
that's very important as a Director of Health Services. I do a 
lot in the area of health, and I truly appreciate someone who's 
had an understanding of how to run local programs, and what we 
do when we fashion policy, how to make it work on a local 
level . 

Again, she knows these issues from the ground 
up. She's established a lot of very successful programs. 

She, I think, will service this administration 
well. She's very visionary, but she also understands how to run 
a department of this size. 

She's done great job thus far. I'm really proud 
to be able to introduce her. 

I won't spend a lot more time, other than to 
close and give you a few tidbits on her credentials. 

Clearly, she received her Masters in Public 
Health from the University of California at Los Angeles, School 
of Public Health, and she received her doctoral degree from 
UCLA's School of Public Health as well. 

It is with great pleasure that I bring her before 
you today, and I urge your respectful consideration of her 
nomination. 

CHAIRMAN BURTON: Thank you, Senator. 

Doctor. 

SENATOR ORTIZ: I want to make sure you nominate 
her though. I'm not going to leave until she's taken care of. 

[Laughter. ] 



CHAIRMAN BURTON: Who's vice chairing your 
committee? 

SENATOR ORTIZ: You do have three bills before me 
today, Mr. Chairman? 

CHAIRMAN BURTON: Who's the Vice Chair? 

SENATOR ORTIZ: They're not starting until 1:45. 

CHAIRMAN BURTON: Go ahead, Doctor. 

DR. BONTA: Good afternoon, Mr. Chairman and 
Members of the Senate Rules Committee. Thank you for your time 
this afternoon. 

I'm excited by the opportunity that has been 
afforded to me by Governor Gray Davis to lead the California 
Department of Health Services. 

The Department is one of the largest and most 
complex health and public health organizations in the country. 
With a budget of more than 234 billion, and over 5600 positions 
working out of more than 60 locations throughout California, the 
administrative demands alone are significant. 

But beyond these requirements, the Department 
faces many health and public health challenges and opportunities 
as well. Environmental concerns, the threat of bio-terrorism, 
emerging infectious diseases, fraud in the Medi-Cal program, 
ensuring that quality health care services are available, and 
responding to an ever diversifying California population are 
just some of the issues that the Department faces on a daily 
basis . 

I come to the position with 27 years of working 
in health care and in public health as a nurse and as a health 



program administrator working in New York and in the state of 
California. I've had the benefit of being educated at one of 
California's finest public universities, UCLA, where I received 
both my Masters and doctorate degrees in public health. 

While at UCLA, I had extensive course work in 
community health sciences, statistics, data analysis, 
epidemiology, program and policy development, and evaluation. 
And I had the opportunity to interact with faculty members, many 
of them nationally and internationally recognized experts in 
their fields, whom today I count among my colleagues and 
friends . 

Obviously, running an organization as large as 
the Department of Health Services is a task greater than the 
abilities of any single person. To that end, I have begun the 
process of pulling together a talented and diverse team of 
managers to guide the Department over the next several years. I 
intend to see that they are guided not only by the standards of 
law and regulation, but also by managerial flexibility and by 
good old common sense. 

I've had the opportunity to meet with most of you 
and with members of your staff over the last several weeks and 
months to discuss the issues of particular importance and 
concern to each of you, and there is certainly no shortage of 
issues. These are complex, programmatic, and policy issues that 
do not lend themselves to easy solutions and will not be 
resolved over night. However, I'm committed to continuing to 
have a dialogue with you and other stakeholders to work toward 
solutions to these challenges. Keeping the lines of 



communication open is necessary to ensuring that public health 
policy issues are discussed with input from those communities 
that are served. 

As a public health professional, I know that 
science cannot always provide all of the answers to the issues 
that we face. The practice of public health is, at times, as 
much an art as it is a science. 

The Department needs to assess its programs and 
services, and begin from within to identify ways in which it can 
be a stronger department. 

As issues and problems are identified, the 
solutions implemented will be done so with a focus on ensuring 
that quality care and services are being delivered in a fashion 
that allows us to maintain the trust of the public that taxpayer 
dollars are well spent to protect and improve California's 
health. 

As I wrote in my goal statement that I submitted 
to you last week, the people of California deserve the highest 
quality health and public health programs. In my tenure as 
Director, I will ensure that the Department of Health Services 
continually strives to meet that expectation so that we can 
continue to improve the health of all- Calif ornians. 

Thank you. 

CHAIRMAN BURTON: Thank you. 

What steps is the Department taking, if any, to 
reduce the drop off in Medi-Cal coverage that seems to be 
occurring as families leave welfare and move on to the 
employment rolls? 



6 

DR. BONTA: This is a very important item for us, 
certainly to increase the number of individuals that are 
enrolled in the Medi-Cal program. 

We're trying to simplify the process. There was 
recently -- the Medi-Cal Public Policy Institute did a report of 
beneficiaries/ actually interviewed Medi-Cal beneficiaries; 92 
percent of them were satisfied with the services that are 
rendered, but they indicated that we need to simplify the 
process . 

So, we're continuing to do that, looking to 
enhance our mail-in application/ to expand it/ not only for 
children/ as is currently with Healthy Families and with the 
Medi-Cal program/ but to adults as well. 

We're looking also to and working on simplifying 
the quarterly reports. 

We have an enhanced media campaign so that we can 
attract individuals who may not know that they're eligible for 
both Medi-Cal and Healthy Families as well. 

CHAIRMAN BURTON: That deals with people who are 
off and were trying to get in the program. 

How about the ones that were on it during welfare 
and then dropped off when they got jobs-? Do you have a way of 
monitoring them? 

The counties claim that it's difficult to locate 
the people. 

I guess the bottom line is, are you working with 
the counties to come up with/ one, a way of finding these 
people; and two, to simplify? 



You know, people look at the form, and when we're 
dealing with people on Medi-Cal, we're not dealing necessarily 
with college graduates and, in some instances, high school 
graduates, and have the form kind of simplified so that about a 
million uninsured children maybe could end up getting some form 
of health care? 

DR. BONTA: Yes, sir. It's very much of a 
priority for us to continue to meet with the county 
representatives so that we're looking at some of the hurdles 
that they're facing, whether it's in their computer problems, or 
whether it's in their staffing issues, or the complexity of the 
forms, to bring them in as part of the dialogue so that we can 
look at: how do we simplify this; getting their input; 
involving them in discussions, and making some of those changes. 

We have a task force that involves the county and 
some of the county executives. 

CHAIRMAN BURTON: Keep us apprised of that, 
especially Senator Solis's subcommittee on the measure. 

DR. BONTA: Be happy to. 

CHAIRMAN BURTON: How are you approaching the 
issue of provider rates in the program, which are woefully 
inadequate to almost, I don't know any providers that are 
getting adequate compensation? It's pretty tough to keep them 
in the program. 

How do you decide when and where rate increases 
would be warranted? 

DR. BONTA: I know that the level of rates right 
now, that they are low. This has been a historical problem. 



8 

So, it's something that it's going to take time to rectify. 

There have been some very modest increases, and 
certainly in the CCS program, a five percent increase was 
included. Some of the specialty areas, we saw in this year's 
budget an increase in that. 

There needs to be continual work on that to 
identify priorities for changes and adjustments, and so we're 
continuing to work on that. 

CHAIRMAN BURTON: Well, you can suggest rate 
increases to, I guess, either the Governor or Finance; right? 

DR. BONTA: That's correct. 

CHAIRMAN BURTON: And it's got to be approved in 
the budget; right? 

DR. BONTA: Correct, sir. 

CHAIRMAN BURTON: So, how do you make your 
determination? 

I think it's Finance's responsibility to figure 
out the amount of money available, but I think that your 
Department ought to really try to be bold enough to figure out 
exactly, without going to the total back to fee-for-service, 
what would be right. 

Because when providers drop off, then the level 
of care drops off. 

DR. BONTA: Part of what I've been doing, sir, is 
attending the budget sessions, both in the Assembly and the 
Senate. This is the first time, I believe, that a Health 
Department Director has attended in many years. 

And I'm going there to learn first-hand from some 



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of the stakeholders who are coming, testifying in the committee 
hearings about the some of the impacts that our rates have 
throughout California so that I can convey that as well. 

CHAIRMAN BURTON: They don't come to you on their 
own? 

DR. BONTA: Oh, definitely, they come to me also. 
Definitely. 

CHAIRMAN BURTON: There's some concern among some 
individuals that with Medi-Cal being linked to welfare, that 
some people don't like to join the program because of, I guess, 
what they consider to be a stigma. 

Could we either figure out a way, should we 
figure out a way to de-link it, or what could we do to mitigate 
the perception people have that if they provide health care for 
their kids through this program, somehow they're like on 
welfare? 

DR. BONTA: I think there's been a lot of 
discussion about the potential of a stigma being attached to the 
Medi-Cal program. I'm not sure that that's totally accurate. I 
think some of it may be perception. 

We need to be able to work, and evaluate, and 
interview some of the beneficiaries. The Medi-Cal Policy 
Institute, for instance, their report showing the high degree of 
satisfaction, some of has to be by word of mouth, of 
beneficiaries being able to talk to other individuals and 
encourage them to apply for the program. 

Part of the simplification, working with the 
counties, et cetera, will get us a better handle on what exactly 



10 

is stigmatized in the program, and work diligently to try and 
remove some of those barriers. 

Certainly the advertising and media campaign is 
part of that. 

CHAIRMAN BURTON: Couple more questions on a 
different issue. 

You've got responsibility for the Safe Drinking 
Water Act to set standards as close as feasible to the public 
health goals of the Office of Environmental Health Hazard 
Assessment. 

Why has the Department not lowered the DBCP 
standards? Just haven't gotten to it, or what? 

DR. BONTA: In fact, it's about 40 percent — if 
you look at a million people, about 40 percent of individuals 
will get cancer, unfortunately, in a lifetime. 

When we've been looking at the DBCP rates, we've 
been looking at what kinds of impacts would occur from changing 
some of the standards. 

We've looked at the current maximum level — 

CHAIRMAN BURTON: Forty percent? 

DR. BONTA: If you looked at a population of a 
million people, about 40 percent of that million would have 
diagnosis of cancer in a lifetime. 

CHAIRMAN BURTON: Does that 40 percent hold as 
you go up to two million? Does it drop down, or what? 

DR. BONTA: I'm not sure of that, sir. 

CHAIRMAN BURTON: It seems like a hell of a lot, 
40 percent. 



11 

DR. BONTA: It is a lot. Cancer rates continue 
to be a problem in the overall population. 

CHAIRMAN BURTON: I know, but 4 percent — 

DR. BONTA: Of a million. 

CHAIRMAN BURTON: But unless you're picking a 
million that live near a toxic dump, 40 percent of a million, 
that's a hell of a high percentage. 

DR. BONTA: It's all types of cancer. 

CHAIRMAN BURTON: I understand that. I'm just 
surprised that it would be that high. 

DR. BONTA: When we've been looking at the 
maximum level of DBCP in drinking water, we have looked at, you 
know, how we measure this would be with a theoretical increase. 
We've looked at changing the standards would cause about only a 
very a small number of additional cancer risk. 

So, our recommendation at this point has been 
that the maximum level of the pesticide DBCP in drinking water 
should remain the same because the reduction would not result in 
a significant effect on the cancer rates on drinking water. 

I know this has been something that has been of 
concern. It's going to be something that we will continue to 
monitor. It's very important to us to have as best the levels 
of standards in drinking water for all of California, so.it is a 
major issue for us. 

We're working with the California Environmental 
Protection Agency as well in doing some of the work on DBCP. 

CHAIRMAN BURTON: So, it's 4 percent, and then 
if you did something about the standards of DBCP, it wouldn't 



12 

appreciably reduce the 40 percent? 

DR. BONTA: That's correct. 

Also, the costs are part of the mandate that the 
Health Department is currently tasked with looking at when we're 
evaluating this as well. 

The cost that we were looking at, in order to 
reduce one-tenth of the cancer cases per year, there's a cost 
for the public water system of an estimated $111 million. So, 
that's significant. 

While it's always difficult, and I hate to put a 
cost on a person's life, this has been part of the evaluation 
that has gone into the determination whether or not to change 
the standard. 

CHAIRMAN BURTON: I thought there were studies 
that concluded the current standard does not protect public 
health. Those studies are irrelevant, or what? 

DR. BONTA: It's my understanding on this issue, 
the California Environmental Protection Agency establishes a 
public health goal. In doing the goal, they were looking at 
lowering the amount of DBCP as a potential goal. 

It then comes to the Department of Health 
Services to actually look at whether or not that is permissible 
in terms of would it make an effect on the health consequences 
of individuals, and would it have a monitary effect on the water 
systems as well. 

CHAIRMAN BURTON: Where do you get the trade-off? 
What's the percentage of deaths versus the percentage of the 
amount of cost? Where does the utility of the conduct equal the 



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magnitude of the risk? Has somebody got a formula? 

DR. BONTA: They develop — it's my understanding 
they use cost data, and the cost data comes from our own 
information that the Department of Health Services has from the 
water supply system. 

CHAIRMAN BURTON: Did they get it from the people 
that would be affected if you made them change the standard? 

DR. BONTA: I believe so. 

CHAIRMAN BURTON: Does anybody ever double-check 
their numbers? 

DR. BONTA: We do not use just the industry 
numbers. I know that that had been concern of mine and other 
individuals, whether or not the cost figures were strictly from 
industry, and that's not the case. 

When I talked with staff, they indicated we also 
have figures that we're able to put together as part of our 
ongoing — 

CHAIRMAN BURTON: Would there be some place 
where, you know, you figure, well, one-tenth of one percent 
doesn't do it; four-tenths of a percent does do it? 

If you're supposed to equate life with cost, 
where do they interconnect and go the other way? Do you have a 
formula on that? 

DR. BONTA: I believe the staff do. I don't have 
it handy and available, but I could find out for you. 

CHAIRMAN BURTON: Yes, maybe we'll get a letter 
to you. It'd just be kind of interesting. 

Thank you very much, Doctor. 



14 

Senator Lewis. 

SENATOR LEWIS: While we're on that topic, and 
out of curiosity, isn't there a pretty good correlation between 
the increase in life expectancy and the increase in cancer 
rates? 

DR. BONTA: I would think that there' d be a 
correlation, certainly, in terms of the two of them. 

SENATOR LEWIS: My understanding is, especially 
with, for example, the male population, as men live 
substantially longer, there 're going to be huge increases in the 
rates of prostate cancer. 

DR. BONTA: That's correct. 

SENATOR LEWIS: I wanted to ask you about the 
airing of a show last October on 60 Minutes , where they were 
talking quite a bit about Medi-Cal fraud and other issues. 

One of the things that was mentioned on the show 
was pretty shocking, the differentiation of prices from 
over-the-counter prices to from Medi-Cal pays. 

For example, an anti-shock stabilizer, 
over-the-counter price is five-and-a-half dollars, and Medi-Cal 
pays 162. Knee supports, $25 versus $80, and support panty 
hose, $18 versus $90. 

How did you get into this mess? 

DR. BONTA: When that aired, it was a shock to 
me, too, in terms of some of the differences in prices. 

The difference on some of the devices that are 
over-the-counter devices, and what we are actually paying for is 
that they're not supposed to be over-the-counter devices. 



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They're supposed to be actually fitted by a practitioner, 
supposed to involve the cost for that fitting, for the 
additional prescription based with it. 

Unfortunately, what we were seeing as part of the 
fraudulent activity was, in fact, that sometimes the durable 
medical equipment providers were actually utilizing an 
over-the-counter device without the special fittings, without 
the additional measures. 

In the area, for instance, of support panty hose, 
this is really looking at individuals who have had circulatory 
problems and involves a certain quality of the materials, and 
they're a little bit more expensive. 

Unfortunately, in that area, too, where we were 
seeing some fraudulent activity that was televised as part of 
that 60 Minute piece, with that they were using imported 
stockings from France that had a label on it that was affixed 
that said that it had so much percent of Lycra that would 
conform to the standards. 

So, we have since been revisiting some of those 
standards, looking at ways in which we could stop the misuse of 
this . 

And certainly, sir, we've also been looking at 
the rate, at whether or not this is in conformance with what you 
and I, or any reasonable person would see as a price that's 
reasonable. 

SENATOR LEWIS: The Governor's budget has $2 6 
million for 265 additional staff for fraud. 

If that is adopted, what are your expectations? 



16 

How are we going to be doing a year from now? 

DR. BONTA: I expect that we should see a lot 
more activity, certainly, in which we have identified the fraud, 
been able to do more of our field audits that we've currently 
started doing. 

As you know, the Governor created the Medi-Cal 
Provider Fraud Prevention Bureau, and as part of that Bureau, 
they have been doing actual more field work. 

These staff members would enhance and double that 
capability out on the street. We'd also be doing more audits. 
We would be working extensively on some of the computer programs 
that we currently have put more edits in. 

We'll be continuing to do our efforts on 
screening for pre-check right, which is a mechanism where, 
before the checks are cut by the Controller's Office, that we do 
the edits to see if there are unusual billing patterns. 

So, I expect that we will continue our efforts. 
We will be enhancing our efforts, and that we will see more 
prosecutions. We will see a turning around of some of the fraud 
that's occurring in the Medi-Cal program. 

SENATOR LEWIS: Just lastly, I wanted to touch 
base would you on an issue that you and I discussed privately 
when you came to my office that day, dealing with the 
Fountainview Company and the complaints that they have filed, 
and the concerns that they have. 

They have a facility in my district. They seem 
to think that they've been singled out for some pretty harsh 
treatment from some of the folks in the Department. 



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I understand that you've directed your internal 
audits section to investigate the allegations. 

DR. BONTA: Correct. 

SENATOR LEWIS: But you also have the latitude to 
turn over the investigation to the Attorney General's Office? 

DR. BONTA: That's correct. 

SENATOR LEWIS: Why did you choose not to do 
that? 

DR. BONTA: Because we're still doing the 
investigation now internally. Certainly, if I feel that we need 
the assistance of the Attorney General's Office, we will do so. 

We've been working very closely with the Attorney 
General's Office certainly in the Medi-Cal fraud area and 
investigations in other arenas. 

So, at this point, though, we have initiated the 
investigation through Audits and Investigation in the 
Department, which is separate from Licensing and Certification. 
I feel that there are sufficient controls to be able to 
investigate this. 

SENATOR LEWIS: But the Chief of the Internal 
Audits Division, Mr. Macala, said in a letter dated March 17, 
"The investigation would not address issues relating to the 
survey process and findings, " which is really kind of at the 
crux of some of their concerns. 

What's the point? 

DR. BONTA: The reason that we were not looking 
at the survey findings is, in fact, that the facility has 
requested a special hearing with HICVA. That is scheduled for 



18 

June of this year, and that will actually get into the details 
of the survey. So, we are not investigating that portion 
because that's being handled by the federal government as part 
of this review that they have requested as part of their appeal 
and as part of the rights of the facility. 

In addition to that, they had other outstanding 
issues which had more to do with a feeling that there were 
problems with the staff who conducted the survey, and that is 
being handled by Audits and Investigations. So, there are two 
issues . 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: You've answered most of the 
tough questions. Now I'll ask you an easy one. This has to do 
so with the federal foster care Medi-Cal extension option. 

Last year, Congress passed the Foster Care 
Independence Act of 1999, which expands the federal funding and 
services for foster youth and recently emancipated foster 
youth. 

And the intent of the bill was to improve the 
access to health care for youth during the transition from 
foster care to adulthood and self-sufficiency. This Act passed 
by Congress enables states to extend the Medi-Cal coverage to 
former foster care youth to their 22nd birthday. 

Do you think that this would really help us? And 
are you aware of the fact that one of our colleagues has a bill 
in now to encourage us to adopt the federal Medicaid eligibility 
option? 

DR. BONTA: Yes, Senator. 



19 

1 I think that it's very important for us to be 

2 able to help in the transition, particularly for foster children 

3 as they advance from 18 to their 22nd birthday. This is 

4 something that would be very positive. 

5 We have seen from experiences that we've heard 

6 from counties in terms of these young people that, as they're 

7 trying to make their transition, they're trying to be able to 

8 have a job, to get on with their education, to move into usually 

9 housing on their own. And to be able to cover their medical 

10 costs in this area of transition would be very important, and 

11 it'd be something that I'd be supportive of. 

12 SENATOR HUGHES: When I interviewed you earlier, 

13 I asked you were you aware of any need to further communicate 

14 with other agencies of state government, because we've become 

15 aware that there are a lot of duplications of services. 

16 Are there any particular ones that come to your 

17 mind where you'd like to confer with other agency heads? 

18 DR. BONTA: Yes. We've been very fortunate 

19. because in the Health and Human Service Agency under Secretary 

20 Grantland Johnson, he's really fostered communication amongst 

21 all the departments. 

22 We've been having a retreat recently. We meet. 

23 We discuss issues together. We're looking at joint projects. 

24 In the area of the Governor's initiative on Aging 

25 with Dignity, for instance, it combines both the resources of 

26 the Department of Aging as well as the Department of Health 

27 Services to look at this, very much of an issue. 

28 I've been working with Director Mayberg, Steve 



20 

Mayberg, from Department of Mental Health. Both of us were on a 
panel together in Bakersfield. We discussed some of the rural 
implications for health as well as for mental health services. 

This really extends to all of the departments 
there. 

Outside of the agency, we've had communication. 
I've been able to have communication with Winston Hickox from 
California Environmental Protection Agency, Ed Lowry in that 
agency as well. 

And then with Maria Contreras-Sweet, we've 
started some discussion in the housing area, where we'd like to 
see some joint projects that we could do, perhaps in lead 
abatement or other kinds of areas, where we could discuss the 
health implications, actually see some joint, maybe, 
applications to the federal government that would combine the 
resources of Health and Human Services as well as Housing. 

SENATOR HUGHES: I'd like to move the nomination. 

CHAIRMAN BURTON: Senator Knight may have a 
piercing question that'll change your mind — 

SENATOR HUGHES: If he has a piercing question, 
I'll change his mind. 

[Laughter. ] 

SENATOR KNIGHT: Once again I've been out done by 
the Senator across the hall there, so I'll relinquish my 
time . 

CHAIRMAN BURTON: A question just briefly. 

Has the Department recommended any specific 
measures to improve the quality of care at the Barstow Veterans' 



21 

Home? 

DR. BONTA: Yes. We have been working with the 
Department of Veterans Affairs. 

On our last site visit, which we found the agency 
to be in substantial compliance with the federal regulations, we 
indicated that there continue to be issues related to 
documentation. We've asked them to work on their computer 
system, and we're monitoring them on a monthly basis. They must 
submit reports to us about this. 

CHAIRMAN BURTON: How is the Department currently 
monitoring compliance with nursing home wage pass-through that 
was enacted in last year's budget? 

DR. BONTA: We will be doing some auditing on 
this to ensure. I know that currently, we're also anticipating, 
as there are complaints, that we will do the investigations of 
the wage pass-through to ensure that the regulations are adhered 
to by the nursing home industry. 

CHAIRMAN BURTON: I would encourage you to do it 
before this year's budget, because otherwise, you know, we may 
end up reducing the money given the nursing homes if we don't 
know that they're passing through, or if they are passing it 
through, maybe we'll do better. 

So, I would encourage you to finish the 
monitoring in time for the May revises. 

Also, just back to that forty percent, that could 
include things like just minor skin cancers from the sun, and 
stuff like that? 

DR. BONTA: Yes, sir. 



22 

CHAIRMAN BURTON: Do you have any family you'd 
like to introduce. 

DR. BONTA: Yes. My husband's here today, Frank 
Matricardi . 

And my daughter is here. She is a senior at UC 
Berkeley. She'll be graduating next month, Alicia Matricardi, 
and my husband, Frank Matricardi. 

My two sons were unable to be here. One is a 
freshman Loyola Marymount in Los Angeles, and the other is an 
attorney in New York City in practice there. He and his wife 
and my new grandbaby are back in New York. 

CHAIRMAN BURTON: Well, congratulations. Thank 
you. 

Witnesses in support briefly, like name, rank and 
serial number. And your written statements will be submitted 
for the record. 

Identify yourself. You're in support? 

MS. KUFFNER: Thank you, Mr. Chairman and Members 
of the Committee. I'm Marie Kuffner, a practicing physician 
from Los Angeles California. 

And on behalf of the California Medical 
Association, I'm pleased to express our sincere support for 
Diana Bonta's appointment for Director of the Department Health 
Services. She is extremely well qualified, and we physicians of 
the California Medical Association look forward to a long, 
fruitful relationship on behalf of our patients and physicians 
in California. 

CHAIRMAN BURTON: Thank you very much. 



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Next. 

MR. MALAN: Mr. Chairman and Members, Justin 
Malan, with the Environmental Health Directors. 

We encourage your appointment of Dr. Bonta. We 
believe that for once we have a champion of public health and 
the environmental health. And we know that we'll work well with 
her. 

Thank you. 

MS. CASTELLANO: Carmela Castellano, Chief 
Executive Officer of the California Primary Care Association, 
representing 500 licensed nonprofit community clinics throughout 
the State of California. 

It's my pleasure to speak in favor of the 
nomination of Dr. Diana Bonta. I've known her for nine years. 
She is an outstanding health care leader of the State of 
California, representing issues of public health, health systems 
knowledge, knowledge of government programs, her experience at 
the county level. 

And she's a woman of national distinction, given 
her leadership role in the American Public Health Association as 
well. We'd like to acknowledge, I've personally known her as a 
person of individual integrity. She's a problem solver, 
consensus builder, strong commitment to her family, the agency 
she represents, and entire population of California. 

Speak in favor of her nomination. Thank you. 

MS. MARTIN: Senator Burton and Members of the 
Committee, my name is Denise Martin. I'm the President of the 
California Association of Public Hospitals and Health Systems. 



24 

We, too, strongly urge your confirmation of Dr. 
Bonta for this very, very important position for the State of 
California . 

I've worked and known Dr. Bonta for a number of 
years as part of the overall county health care delivery system 
and feel that she is excellently poised to be a champion of 
public health and a champion for creating healthy communities 
throughout the state. 

I just wanted to make one personal reference 
about Dr. Bonta. It's that both of us in past lives, we were 
emergency room nurses. She was out at Belvue in New York, and I 
was at Cook County Hospital in Chicago. And I know through that 
a experience that both of us -- 

CHAIRMAN BURTON: We have a whole lot of people, 
a whole lot of stuff. We enjoy your life story and hers. 

MS. MARTIN: We're very pleased that she is 
recommended, and I think she'll be well poised to take over this 
position. 

Thank you. 

CHAIRMAN BURTON: Thank you. 

DR. HINTON: Short and sweet, I'm Dr. Bette 
Hinton, the Yolo County Health Officer, and a member of the 
Executive Committee of the California Conference of Local Health 
Officers . 

We are very pleased to have Dr. Bonta, who has 
some local experience, at the state level. 

MR. NALDOZA: Art Naldoza, La Cooperativa. We're 
in support. 



25 

MR. ARNOLD: Michael Arnold, representing the 
California Children's Hospital Association, the California 
Dialysis Council, and the California Clinical Laboratory 
Association. 

She is great. She'll do a marvelous job. 

MR. VALENCIA: Mr. Chairman and Members, John 
Valencia, representing both the California Hispanic Chambers of 
Commerce and our national organization, the United States 
Hispanic Chamber of Commerce. 

We commend Dr. Bonta's confirmation. 

MS. COWGER: Terri Cowger on behalf of the 
California Children's Lobby and the Hemophilia Council of 
California in strong support of Dr. Bonta's confirmation. 

MR. HITCHCOCK: Doug Hitchcock, representing the 
California Healthcare Association. 

We're pleased to support this nomination. 

MR. RAMIREZ: Frank Ramirez, representing CAFE de 
California and the American GI Forum, in strong support. 

MS. THOMAS: Terri Thomas, on behalf of the 
Women's Appointment Project, which was a bipartisan group of 
women's groups throughout the state who came together to try to 
identify qualified candidates for positions. 

Dr. Bonta's truly one of our success stories, and 
we recommend her confirmation. 

MS. TORRES -MONTOYA: Martha Torres-Montoya, 
representing the Hispanic Women's Health Association. 

We would like to commend you select an excellent 
candidate for the Director of Health Services. 



26 

I've known Diana for approximately 26 years in 
all capacities and admire her tremendously. 

Thank you. 

MS. SCARDACI: Rita Scardaci, Director of Public 
Health for Plumas County, and I'm President of the County Health 
Executives Association. 

Your choice is excellent. Dr. Bonta is a person 
who is going to be able to bridge the gap between the local 
health jurisdictions. She has a unique quality to look right 
into the heart of issues, complex issues, and work for 
collaborative solutions. 

Thank you. 

MR. BAKER: Steve Baker with Aaron Read and 
Associates, representing the California Association of 
Professional Scientists in support. 

Thank you. 

MS. CAPELL: Beth Capell on behalf of the Service 
Employees International Union in support. 

CHAIRMAN BURTON: Any opposition? 

Moved by Senator Hughes. Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 






27 

SECRETARY WEBB: Burton Aye. Four to zero. 

CHAIRMAN BURTON: Aye. Hold the roll open for 
Senator O'Connell. 

Congratulations . 

DR. BONTA: Thank you. 

[Thereupon the Senate Rules 
Committee acted on legislative 
agenda items.] 

CHAIRMAN BURTON: Sheryl Granzella, front and 
center. 

MS. GRANZELLA: Yes, sir. 

CHAIRMAN BURTON: I would like to introduce my 
good friend, Sheryl Granzella, and you may open. 

MS. GRANZELLA: Senator Burton, Members of the 
Senate Rules Committee, my name .is Sheryl Granzella. 

I am honored and humbled that Governor Gray Davis 
has recommended me to be a Member of the California Horse Racing 
Board. 

I'm a lifelong resident of west Contra Costa 
County. I am employed, as well as my entire immediate family, 
with the Richmond Sanitary Service in Richmond. We're a 
privately held solid waste removal company, and we have been 
providing refuse services to west Contra Costa County and Solano 
County for more than 80 years. 

My father, Richard Granzella, who I'm pleased is 
here with me today, has been President of Richmond Sanitary 
Service for 41 years, and we work very closely together. 

My primary focus at Richmond Sanitary Service is 



28 

providing and maintaining superior customer service for my 
customers. I see the same responsibility as a Member of the 
California Horse Racing Board as a Commissioner, protecting the 
industry and protecting the interest of the public, making sure 
that when a person makes two dollar bet, he's getting an honest 
game, and he's going to get his money's worth. So, in other 
words, it's just another form of superior customer service. 

By no means am I an expert on horse racing, but 
I'm willing to learn everything that I can, and I want to be an 
active participant on the Board. I hope to bring to the job my 
skills and experience from working at Richmond Sanitary and 
serving on many other boards and commissions in my immediate 
area . 

I try to listen to all — I do listen to all 
sides and consider myself to be analytical and quite fair in 
controversial dealings. I am more than willing to work with 
staff and all of you in order to fulfill the mission of the 
Board and uphold the horse racing laws. 

So, I'm very pleased and honored to be here 
today, and hope that you confirm my status as a California Horse 
Racing Board Member. 

Thank you. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: No questions. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: I'm just curious. The horse 
racing industry is a very significant industry. It's a very 
significant industry within California. Very few people are 



29 

aware of it. In fact, gambling has been taken over by other 
forms of gambling with the Lotto and the Indian casinos now. 

What do you plan to do to upgrade the industry of 
horse racing to make people aware of it, and to get people 
interested in that industry again? 

MS. GRANZELLA: Well, I do know that there's a 
whole marketing plan out there trying because of — trying to 
attract new people — or attract people to the track. Attract 
people to the track, to the horse track. 

And with the passage of 1-A, we're hoping that 
maybe we get the casinos and the tracks to get together and have 
simulcast racing in the casinos to attract more people to horse 
racing. 

But the average age, I guess, of the people 
attending the racing is declining, so they have to market 
themselves in a completely different way to attract new 
customers. 

SENATOR KNIGHT: Okay. 

CHAIRMAN BURTON: Just one thing. Labrook owns 
the San Pablo Casino. Is that San Pablo or El Cerrito? 

MS. GRANZELLA: San Pablo. 

CHAIRMAN BURTON: Now they want to either sell 
that, lease that, or join it out with a tribe. 

MS. GRANZELLA: Correct. 

CHAIRMAN BURTON: Does the fact that Labrook *s 
licensed by the Racing Board, have you got any say in that, up, 
down or sideways? 

MS. GRANZELLA: I can't answer that question. 



30 

CHAIRMAN BURTON: Does anybody know that? 

FROM THE AUDIENCE: Labrook is no longer licensed 
by the California Horse Racing Board. Golden Gate Fields was 
purchased by Magna. 

CHAIRMAN BURTON: So, that's just kind of 
curiosity. That actually was one of the concerns that people 
had during the whole Indian thing, was ending up, some tribe 
moving in there. 

I'll move the nomination. 

You introduced Rich. 

MS. GRANZELLA: I'd like to introduce my father, 
Richard Granzella, and my daughter, Carla Peralta. They're here 
with me today. 

CHAIRMAN BURTON: And Uncle Lenny. 

MS. GRANZELLA: Uncle Lenny Stefanelli. 

CHAIRMAN BURTON: And Cousin George Miller's not 
here. But Burt would be very proud. 

MS. GRANZELLA: Yes, he would. I miss Burt. 

CHAIRMAN BURTON: Witness in support. 

MS. MUIR: Linda Muir on behalf of Los Angeles 
Turf Club at Santa Anita. 

I've known Sheryl for a very long time. And I'd 
like to comment on the timeliness of this hearing in Rules, on 
the Monday after the Saturday running of the million dollar 
Santa Anita Derby, which, for the first time, was won by a horse 
trained by a woman trainer. 

We are moving women into racing, and it's about 
time . 



31 

And I enthusiastically support Sheryl ' s 
appointment. 

CHAIRMAN BURTON: They had a great article about 
her in the Times sport section. I remember when it was only a 
hundred thousand dollar purse. Now it's a million. Tracks must 
be doing good. 

Any witnesses in opposition? 

Call the roll. 

SECRETARY WEBB: Senator Hughes. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

We'll hold the roll open. 

Sheryl, thank you and congratulations. 
[Thereafter, SENATOR HUGHES 
added her Aye vote, making 
the final vote 4-0 for 
confirmation. ] 

CHAIRMAN BURTON: Marie Moretti. 

MS. MORETTI: Good afternoon, Senator Burton, 
Senators. My name is Marie Moretti, and I come before you today 
seeking confirmation to the California Horse Racing Board. 

My background is communications, public 
relations, public affairs work. 

And just as a follow-up to your previous comments 



32 

to Ms. Granzella, I, in my public relations background, did work 
on and pitched a story on women in horse racing that ran a cover 
story a few years ago. So, I'd be happy to send that to you, 
sir. 

My experience with horse racing began as 
spectator in the early '70s. Since that time, I've had an 
opportunity to learn about horse racing, not just as a sport or 
entertainment, but as an important revenue-producing California 
agri-business . 

My background in public affairs and public 
relations, I believe, provides me with a good understanding not 
only of the political process, but of communications. I believe 
both are assets to a state board that regulates what can be a 
very complex and multi-faceted industry. 

I believe this is a time of great challenge and 
opportunity for the horse racing industry. Until a couple of 
years ago, the industry was plagued with the highest licensing 
fees in the country. The passage of SB 27 brought California 
horse racing to a more equitable level with other key racing 
states . 

The charge that we have from now on is 
formidable. The Cal-bred program, which was sanctioned by that 
legislation, and a marketing program that was begun, will 
complement a national marketing program that was established 
recently by the NTRA, which is the National Thoroughbred Racing 
Association. 

As I said, I believe there are many opportunities 
and a number of challenges confronting the industry. It is my 



33 

intention if confirmed as a commissioner to promote those 
opportunities and to meet the challenges to the best of my 
ability. 

Thank you. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: No questions. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: One comment. You're all 
enthralled with a lady trainer of recent time. 

I would like to suggest that in 1946 and '47, 
when I was on the track, we had women jockeys. So, you know, 
you're all behind the times. 

MS. MORETTI: We still have a number of women 
jockeys. Not as many in California as they do back east, 
unfortunately. 

CHAIRMAN BURTON: Robyn Smith. 

I move the nomination. 

Any witnesses? Do you have anyone you want to 
introduce. Not here. 

Witnesses in opposition? Hearing none, call the 



roll. 



SECRETARY WEBB: Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. 



34 



CHAIRMAN BURTON: Aye. Hold the roll open. 
Congratulations, Marie. 
MS. MORETTI: Thank you. 

[Thereafter, SENATOR HUGHES 

added her Aye vote, making 

the final vote 4-0 for 

confirmation. ] 
[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 2:25 P.M.] 
— ooOoo — 



35 

CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

^ IN WITNESS WHEREOF, I have hereunto set my hand this 

day of Cj^&jJL i -< -'"•"-■■ 








lorthand Reporter 



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^HEARING 

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MONDAY, APRIL 24, 2000 
3:36 P.M. 



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MAY 2 2 2000 

SAN FRANCISCO 
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APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

SENATOR JACK ' CONNELL 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

CHRIS BURNS, Consultant to SENATOR KNIGHT 

ALSO PRESENT 

MARK A. BOSETTI, Member 

State Board of Forestry and Fire Protection 

SENATOR BYRON SHER 

SENATOR DEBRA. BOWEN 

STAN L. DIXON, Member 

State Board of Forestry and Fire Protection 

SENATOR WES CHESBRO 

ROBERT C. HEALD, Member 

State Board of Forestry and Fire Protection 

ANDREW "KIRK" MARCKWALD, Member 

State Board of Forestry and Fire Protection 



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LORETTA M. LYNCH, Member 
Public Utilities Commission 

JOHN WHITE 

Center for Energy Efficiency and Renewable Technologies 

JAN SMUTNY- JONES 
Independent Energy Producers 

ART CARTER 

California Pipe Trades Council 

State Association of Electrical Workers 

Sheet Metal Workers Union 

BOB BALGENORTH 

State Building Trades Council 

MICHAEL MONAGAN 
Calpine Corporation 

CARL W. WOOD, Member 
Public Utilities Commission 

SENATOR JACKIE SPEIER 

JIM KELLOGG 

Pipe Trades Council 



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IV 

INDEX 

Page 

Proceedings 1 

Governor ' s Appointees : 

MARK A. BOSETTI, Member 

State Board of Forestry and Fire Protection 1 

Background and Experience 1 

Statement of Concerns by 

SENATOR BYRON SHER 2 

Statement of Concerns by 

SENATOR DEBRA BOWEN 4 

Questions by CHAIRMAN BURTON re: 

Board's Commitment to Restoring and 

Protecting Salmon Habitat, and 

Extending Sunset Date of Interim Regs 5 

Questions by SENATOR KNIGHT re: 

Program Options to Support Salmon Habit 7 

Motion to Confirm 9 

Committee Action 10 

STAN L. DIXON, Member 

State Board of Forestry and Fire Protection 10 

Introduction and Support by 

SENATOR WES CHESBRO 10 

Background and Experience 11 

Questions by CHAIRMAN BURTON re: 

Commitment to Implement New Rules 

Package or Extend Sunset of Interim Rules 13 

Industry Reaction to New Regs 14 



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Questions by SENATOR KNIGHT re: 

Other Options Available to 

Restore Salmon Habitat 15 

Questions by SENATOR HUGHES re: 

Type of Leadership 16 

Motion to Confirm 18 

Committee Action 18 

ROBERT C. HEALD, Member 

State Board of Forestry and Fire Protection 19 

Background and Experience 19 

Questions by CHAIRMAN BURTON re: 

Definition of Forester 19 

Commitment to Permanent Regs 20 

Questions by SENATOR KNIGHT re: 

Quote Used to Justify Policies 21 

Other Options to Protect Salmon 22 

Questions by SENATOR HUGHES re: 

Great Academic Background 24 

Motion to Confirm 25 

Committee Action 25 

ANDREW "KIRK" MARCKWALD, Member 

State Board of Forestry and Fire Protection 25 

Background and Experience 25 

Questions by CHAIRMAN BURTON re: 

Involvement with Trinity River 27 



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Motion to Confirm 28 

Committee Action 29 

LORETTA M. LYNCH, Member 

Public Utilities Commission 29 

Introduction and Support by 

CHAIRMAN BURTON 29 

Background and Experience 29 

Statement of Support for Both Candidates by 

SENATOR DEBRA BOWEN 3 

Questions by CHAIRMAN BURTON re: 

Deaf and Disabled Telecommunication 

Program 31 

Reverse Directories 34 

Advice Letter vs. Formal Application 3 6 

Questions by SENATOR KNIGHT re: 

Disruption Associated with Changing 

Area Codes -. 38 

Dedicated Plan to Control Area Codes 39 

Statements by SENATOR O'CONNELL re: 

Discussions with Candidates on 

Rate Regionalization, Water, and 

Water Delivery 41 

Questions by SENATOR HUGHES re: 

Pac Bell's Rate for Use of 

Reverse Directory 42 

Privacy Concerns Regarding 

Reverse Directory 43 

Notification Notices 44 



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Questions by CHAIRMAN BURTON re: 

Selling Unused Telephone Numbers 46 

Increasing Number of Area Codes 47 

Questions by SENATOR KNIGHT re: 

Possibility of New Area Code for 

San Francisco Area 49 

Witnesses in Support: 

JOHN WHITE 

Center for Energy Efficiency and 

Renewable Technologies 49 

JAN SMUTNY-JONES 

Independent Energy Producers 49 

ART CARTER 

California Pipe Trades Council 

State Association of Electrical Workers 

Sheet Metal Workers Union 49 

BOB BALGENORTH 

State Building Trades 50 

MICHAEL MONAGAN 

Calpine Corporation 50 

Motion to Confirm 50 

Committee Action 51 

CARL W. WOOD, Member 

Public Utilities Commission 51 

Background and Experience 51 

Questions by CHAIRMAN BURTON re: 

Slamming and Cramming 52 

New Area Codes and Reverse Directories 54 

Need to Look at Process of 

Advice Letters 54 



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Questions by SENATOR KNIGHT re: 

Gore's Tax for Internet Service in 

Schools 56 

Questions by CHAIRMAN BURTON re: 

Stranded Costs and IOUs 57 

Motion to Confirm 57 

Statement of Support by 

SENATOR JACKIE SPEIER 57 

Witnesses in Support: 

JAN SMUTNY- JONES 

Independent Energy Producers 58 

JIM KELLOGG 

Pipe Trades Council 58 

ART CARTER 

State Association of Electrical Workers 

Sheet Metal Workers Union 59 

MICHAEL MONAGAN 

Calpine Corporation 59 

Committee Action 60 

Termination of Proceedings 60 

Certificate of Reporter 61 



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P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 

CHAIRMAN BURTON: Gubernatorial appointees 
appearing today, Mark Bosetti, Member, State Board of Forestry 
and Fire Protection. 

MR. BOSETTI: Chairman Burton, distinguished 
Members of the Rules Committee, my name is Mark Bosetti. I've 
been appointed by Governor Davis to fill the forest industry 
seat on the State Board of Forestry and Fire Protection. 

I'm a registered professional forester and bring 
to the Board 18 years of experience working in the interior 
forests of northern California. My expertise is in timber 
evaluation and raw material acquisition. 

I'm currently employed as Division Timber Manager 
for Sierra Pacific Industries in Berney. As Division Timber 
Manager, I have responsibility for acquisition of logs and 
timber from both industrial and non-industrial forest 
landowners. 

My interaction with landowners that are preparing 
to bring their timber to market provides me with the perspective 
on how landowners view and incorporate regulatory mandates into 
their forest management decisions. I believe that this 
perspective can be of value to the Board. 

Our state's population growth has increased the 
demand placed on our forested landscapes to provide wood fiber, 
clean water, open space and habitat for fish and wildlife. As 
these demands have increased, so has the controversy over how 
California's privately owned forests should be managed. This 



controversy has led to increased uncertainty for forest 
landowners and has caused significant restructuring of forest 
ownership over the past two decades. 

If confirmed, I will work to shape policy and 
regulations that do three things. 

One, recognize the diversity of forests to which 
policy and regulations will apply by relying on site specific 
prescriptions and mitigations to accomplish forest management 
goals. 

Two is, provide Californians assurance through 
enforcement and review that forest management activities are in 
compliance with all applicable environmental laws. 

And three is to encourage forest landowners to 
maintain their commitment of capital to forest management. 

Questions? 

CHAIRMAN BURTON: I think that Senator Sher, who 
is Chair of both the policy and the budget committee, wanted to 
come before the Committee and make a statement in lieu of 
bringing all of you before the budget committee in the budget 
hearings. So, Senator Sher. 

SENATOR SHER: Thank you, Mr. Chair and Members 
of the Committee for the opportunity just to say a few general 
words concerning the Board of Forestry as part of today's 
confirmation hearing for four of the Governor's appointments to 
the Board. 

I want to make clear that I'm not here today to 
take a position one way or another on the individual nominees. 
I have said I've had the opportunity to work with some of them, 



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particularly Mr. Kirk Marckwald, who you'll be hearing from, and 
found him, as I'm sure- the other members are, to be capable and 
thoughtful additions to the Board. 

But I am here today to ask that the Rules 
Committee determine whether these appointees are committed to 
follow through on the initial but temporary first step they took 
earlier this year to strengthen the forest practices rules to 
protect our forests and aquatic habitat before the Legislature 
adjourns at the end of August. 

Specifically, I would hope that the Committee 
could inquire whether the Board members will act sooner than 
next fall to revisit, and strengthen, and make permanent its new 
forest practices rules designed to address concerns over 
destruction of salmon and their habitat. 

As you know, after years of inaction and repeated 
urging by some of us in the Legislature, the Board of Forestry 
finally, last month, did approve some new prescriptions for 
logging practices. However, many experts believe that the rules 
are not adequate to protect salmon or their habitat. But most 
importantly and inexplicably, the rules are designed to sunset 
at the end of the year, which will thereby eliminate even the 
modest new protection afforded by these rules and revert the law 
to the status quo. 

So, my point is that we ought to try to see 
action in the Board before the Legislature goes out of session 
at the end of August. 

In fact, we all ought to be working together 
while the session is still going to do all that we can to enact 



a package of actions which will help restore and protect the 
north coast fisheries, provide state funding incentives to 
watershed assessment activities, and to have in place strong 
interim prescriptions on water courses to ensure protection of 
the salmon, and not see what's on the books now go out of effect 
on January 1st of next year. That way, the Legislature will be 
included in the process. We'll have an opportunity to be a part 
of this process and not have this final action or inaction occur 
after we're out of session. 

I thank you for your consideration. 

CHAIRMAN BURTON: Thank you. 

Senator Bowen. 

SENATOR BOWEN: Thank you, Senator Burton and 
Members. 

I just wanted to take 30 seconds to say that I 
agree with the concerns just expressed by Senator Sher. I want 
to make sure that the Legislature gets a chance to express its 
vision for this particular Board. 

CHAIRMAN BURTON: The concern, and I think all of 
the appointees should be prepared to discuss, is that a long 
time after doing nothing, the Board did something, okay. That 
something, in the view of many, including National Marine 
Fisheries Service, doesn't take it a long way enough to protect 
the salmon. But when that sunsets, everything's off. 

So, the question is, and I know you're just one 
member of the Board, but, you know, at least this Member is 
looking for a commitment that the Board now work on a package of 
actions to do the best they can to help restore and protect the 



north coast fisheries, and do something about the situation 
before we get out of here. 

You've got a couple of problems. If you do 
nothing, then nothing happens. If you don't do enough, there'll 
be some problems with the salmon. And if you don't do enough, 
there will be a problem with your budget next year. So, it's 
kind of everybody's got a problem if nothing happens. 

MR. BOSETTI: Certainly. 

With regard to the question about commitment to. 
following through with a rule package that would implement more 
stringent or a permanent solution to the issue of salmon 
recovery and habitat, I think I, for one, am committed to 
working as hard as I can and as diligently to move in that 
direction. 

Part of the proposal that is out before the Board 
is to come up with a watershed-based analysis to help address 
specific issues relative to anadidymus salmonid habitat stream 
conditions, and I think that is where a lot of effort needs to 
be placed. 

The package that was approved as an interim guide 
applies to a far — more far reaching area than the scientific 
review panel's initial emphasis was for recovery of salmon 
habitat. 

There are some conditions that exist on more of 
the interior reaches of salmon streams that aren't — don't 
exhibit the same characters as they do on the coast. Canopy 
closures are much different. Species compositions are much 
different. Feed water sources, whether it's interior, more snow 



run-off, those type of things are variable, and we need to have 
measures that are in place that address site-specific issues, 
that put these things on recovery, on a trajectory of recovery, 
as quickly and as fast as we can. 

But yes, I am committed to trying to follow 
through and make good on a package before the end of the year. 
And then I need to follow-up with, you know, what I'm learning 
about the regulatory climate and the speed with which things 
move, it's a little unsettling there, you know. You have pretty 
tight timelines to make sure that rules packages are reviewed 
before the OAL and can get implemented. So, we have that time 
clock ticking as well. 

Regarding the sunset, I think there are options 
open to the Board to ensure that the package that's in place, if 
it were to reach the period of sunset and a follow-up package 
was not in place, or in a condition of being in place, we could 
probably, my understanding is, vote to extend that, the 
provision, the rule provision. 

CHAIRMAN BURTON: Yeah, you can. That's 
absolutely right. 

But I don't think people are that happy with the 
interim regs and wouldn't look too kindly upon just consistently 
extending the deadline. I think I understood the reason, 
probably, why you did what you did, given new members, given 
there* re still, I think, several vacancies on the Board. And 
you've got a mix of Wilson people, Davis people. So, probably 
the easiest and least contentious thing for the Board to do was 
to do what you did. 



But many of us view that as like a stopgap deal 
until you do something. But the point that I'm making is that 
we're looking forward to stuff being done, and to know kind of 
what's going on, one, before we get out of here for our recess, 
and two, that — again, speaking for myself when I was a Budget 
Committee Chair, Subcommittee Chair -- sometimes I saw no reason 
to spend taxpayers' money on boards and commissions and 
departments that I figured, if they weren't there, everything 
would be the same. 

And I'm just a piece of cake compared to Senator 
Sher and the people on his subcommittee, as I found out on one 
of my bills earlier today. Where were you when I needed you, 
Pete. 

[Laughter. ] 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: No questions. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: No questions. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Yes, I've got a question. 

Considering your experience in forestry and fire 
fighting, and I don't know much about that. The only thing I 
know is, you don't drink downstream of the herd. 

But what other programs can you institute that 
would support the habitat, the salmon, other than eliminating 
forestry, or preventing fires, eliminating harvesting? What 
other programs can you do? 

MR. BOSETTI: Well, I think, if I understand the 



8 

question, the whole process of recovery of salmonid habitat with 
regard to forest practices and timber harvesting is wound into a 
means of looking at entire watershed conditions: stream course 
crossings, things that we can be doing or removing, or upgrading 
culverts that are impeding the progress of salmon to their 
spawning habitats, designing roads that more adequately 
channel -- 

SENATOR KNIGHT: Is that within your 
responsibility? 

MR. BOSETTI: Yes, it is. I think developing of 
policy and regulations that address the key elements that 
impact — 

SENATOR KNIGHT: To evaluate the impediments to 
the salmon moving upstream, and to then recommend that we either 
build a new road, build bridges and build culverts, or whatever? 

MR. BOSETTI: I think the Board, its purview is 
to take consideration from the various agencies that provide 
input -- the Department of Fish and Game, Water Quality, 
California Department of Forestry — and then promulgate 
regulations or policy that addresses those issues that have been 
brought to light by the supporting agencies. 

As far as fire protection or issues regarding 
fuel loading, certainly that all is incorporated into — did I 
miss the point of the question? 

SENATOR KNIGHT: No, I was just wondering what 
other programs that you could envision instituting that would 
support your directive or your charter. 

MR. BOSETTI: I think one of the key things 



regarding how we get started is a baseline or an idea of what 
are the conditions that exist out there in the forest. I know 
they vary from drainage to drainage, stream course to stream 
course. But through a watershed based approach, you can have a 
planning watershed evaluated for the key elements that are 
impacting whatever species of fish it may happen to be, whether 
it's steelhead or whether it's a coho salmon. And by virtue of 
identifying the issues that are limiting their progress or 
existence, you can then develop some site-specific measures to 
correct or improve the condition of that habitat. 

SENATOR KNIGHT: Okay. 

CHAIRMAN BURTON: Fish, like young kids in high 
school, kind of like to make out when it's dark. 

SENATOR HUGHES: Move. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Witnesses in support, please. Witnesses in 



opposition. 



Do you have family here? 

MR. BOSETTI: Yes, my wife's here with me 



today. 



CHAIRMAN BURTON: Why don't you introduce her. 

MR. BOSETTI: This is my wife, Sandy. I needed 
at least one character witness. 

[Laughter. ] 

CHAIRMAN BURTON: That's good, but trust me. 
None are better than a lot. 

Moved by Senator Hughes. Call the roll. 

SECRETARY WEBB: Senator Hughes. 



10 



SENATOR HUGHES 
SECRETARY WEBB 
SENATOR KNIGHT 
SECRETARY WEBB 



Aye. 

Hughes Aye. Senator Knight. 
Aye. 

Knight Aye. Senator O'Connell. 
SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Burton. 
CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 
[Thereafter, SENATOR LEWIS 
his Aye vote, thus making the 
final vote 5-0 for confirmation.] 
CHAIRMAN BURTON: Thank you, sir. 
Congratulations . 

MR. BOSETTI: Thank you very much. 
CHAIRMAN BURTON: Next is Stan Dixon. 
Senator Chesbro. 

SENATOR CHESBRO: Mr. Chairman and Members, it 
gives me a great deal of pleasure to introduce my friend and 
former colleague, Stan Dixon. I served for number of years on 
the Humboldt County Board of Supervisors with Stan, and I 
believe he's an excellent nominee for this position for 
confirmation. I would encourage your positive vote. 

Stan gets along, and listens, and works well with 
a variety of constituencies which, on this Board, is an absolute 
essential quality. He is both someone who cares a lot about the 
environment, but also understands very well the importance of 
having a timber economy in a county like one that we both come 
from, Humboldt, where many people depend on the forest practices 



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industry for their jobs. And that's a tough balancing process, 
and the Board of Forestry is where those difficult decisions 
come into play. 

I also know he's very committed, has worked very 
hard, for the restoration of our fisheries on the north coast. 
He's been a leader among County Supervisors in northwestern 
California in the whole area of fisheries restoration, and he 
understands that there's a strong interconnection between what 
happens on the land and what happens in the streams to the 
fish. 

Finally, I'd just like to say that he's very much 
a bipartisan person. He and I — I was the only Democrat on the 
Board for quite a few years, but Stan came along and there was 
another Democrat on the Board. But he represented, both as 
Mayor for a number of years of the City of Ferndale, and then on 
the Humboldt County Board of Supervisors, I think the most 
Republican part of the county by far. And I think that is 
reflective of the fact that he is somebody who really puts 
thoughtful policy, and bringing people together, and 
communication first, ahead of partisan or ideological 
considerations . 

I think he will do an. excellent job, has been 
doing an excellent job on the Board. And it gives me pleasure 
to introduce him and offer my full support to his confirmation. 

CHAIRMAN BURTON: Thank you, Senator. 

MR. DIXON: Mr. Chairman, Senators, first of all, 
I want to thank my good friend and former colleague on the Board 
of Supervisors, Senator Chesbro. And to thank this Committee 



12 

for affording us the opportunity to appear here before you this 
afternoon . 

Much of what I would have said in a very brief 
introductory statement, Senator Chesbro has relayed to you 
already. 

My background is essentially local government. I 
served for 12 years on the Humboldt County Board of Supervisors. 
I served 16 years as a Mayor and City Councilman for the City of 
Ferndale, a small city in northern California. I also served 8 
years as a member of the Ferndale Union High School Board of 
Education. 

Obviously, I think that I can bring a perspective 
to the Board representative of many northern rural counties who 
are resource based. As Wes said, Humboldt County has a very 
dependent base with forestry and with fishing. Those issues are 
very inter-related on the north coast. 

I have had the opportunity, representing my 
board, to be assigned to the SMARA subcommittee, which deals 
with gravel mining in river, primarily on the north coast. 

I've also served as one of my board's 
representatives to the North Coast Five County Conservation — 
Coho Conservation Planning Unit. And we've worked diligently 
with the Secretary of Resources and Department of Fish and Game 
to help bring federal money to the State of California, and to 
apply that money to the restoration of salmon and salmonid 
habitat up and down the coast. 

Having said that, Mr. Chairman, I would be happy 
to answer questions. 



13 

CHAIRMAN BURTON: Thank you, Senator Chesbro. 

Could you comment on the earlier questions that 
were posed to the previous appointee? 

MR. DIXON: As it relates to the question about 
the rules, the interim rules package sunsetting on January 1st, 
Senator, I think that the members of the Board have expressed 
over the past several meetings that they certainly would be 
willing to revisit that package to make sure that, if the 
watershed analysis rules are not ready and not implemented, I 
think we would have to have those out by the middle of July to 
get that package effective by January 1st. 

But I think that the Members of the Board would 
be willing, certainly, to revisit the sunset of the interim 
rules and even consider going back to the agency package that 
was before us before the interim rules were adopted. 

CHAIRMAN BURTON: Well, they're certainly going 
to have consider at least the sunset, or they're going to end up 
with nothing; right? 

MR. DIXON: Oh, absolutely. I think that there 
is the possibility that we can bring forward the watershed 
analysis program, which is what I believe National Marine 
Fisheries has indicated is the ultimate resolution to this 
problem. 

There are many — it is a complex issue, and 
there are many problems associated with it, not the least of 
which is the administrative problem and the time problem. 

But I can assure you, Senator, as one member of 
the Board, that certainly we would revisit at least the interim 



14 

rules, and hopefully even the full agency package. 

CHAIRMAN BURTON: How intransigent — I guess 
that's the word -- do you find the industry to any regulation 
that's going to inhibit their ability to make a buck? They're 
not in business to save fish. They're in business to basically 
cut down trees. 

Do you find some of the companies are better than 
others, or at least different from others? 

MR. DIXON: There clearly are leaders in the 
industry that have taken advanced steps to bring their 
harvesting operations not only into compliance, but to be 
precedent setting in the way they do business in the forests of 
Northern California. 

There are those, obviously, that have been 
violators. And I think that there have been certain things put 
in place, one being Senate Bill 621, which allowed for civil 
penalties to be assessed against violators. 

There are other rules packages moving forward 
before the Board right now which would strengthen the role of 
registered professional foresters in the administration of 
timber harvest plans. 

But for the most part, I believe — I lived in 
Humboldt County in the 1950s, when logging was pretty much a 
hit-and-run kind of an operation. They dragged logs down 
salmonid streams and had very little sense of responsibility for 
the fish and for the rest of the environment. 

That has changed dramatically. Most of the 
companies are not only responsible, but exceed the standards 



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that we have. 

But the object, of course, is that there are 
species of fish that are faced with extinction and that may 
require that prescriptions get tougher. And I believe the way 
to do that is through this watershed analysis and the resolution 
of the issue of cumulative impacts on watersheds.. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: I'll ask the same question I did 



before. 



of the herd? 



By the way, do you think about drinking upstream 



MR. DIXON: I certainly do, Senator. 

SENATOR KNIGHT: I just wondered. Nobody else 
laughed before. 

CHAIRMAN BURTON: I didn't hear you, Pete. 

SENATOR KNIGHT: Oh, didn't you? 

What other plans are there available to 
rejuvenate the salmon, or the fish, or whatever species are in 
the rivers, other than logging restrictions, or clear cutting 
restrictions, or whatever, or controlling forest fires? 

MR. DIXON: There are — obviously, timber 
harvesting is not. the only impact on salmonid streams and rivers 
in any part of the state. 

Counties, as a matter of fact, have been one of 
the worst violators in their poor construction of bridges, and 
culverts, and their road constructions, which have been 
responsible for depositing sediment in streams and doing the 
same thing that timber harvest practices have done. 



16 

SENATOR KNIGHT: But again, isn't that a 
responsibility of Fish and Game? 

MR. DIXON: Well, it's a responsibility of 
counties. And we are doing something about that. We have 
learned that we are violators, and that we're learning to 
inventory our roads, to assess our culverts that are barriers to 
fish passage, and we're doing something about replacing those. 

Urban development is problem that is equal to 
timber harvesting. 

SENATOR KNIGHT: Is all of that within your 
responsibility? 

MR. DIXON: No. 

SENATOR KNIGHT: So, what you're saying is, the 
additional plans or the additional programs are working with 
other organizations? 

MR. DIXON: I think to win the battle to save 
fish requires the inter-relationship and cooperation of all 
kinds of agencies and the private sector as well, not just the 
timber industry. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Yes, I was looking at the time 
that you were appointed, July 27th of '99. It's been not quite 
a year. 

What have you learned? I know you do a lot as a 
county supervisor, but what you have learned with serving on 
this Department that gives you some direction now in all of 
these months that you've been there? What kind of leadership 
are you ready to provide? 



17 

MR. DIXON: Senator, one of the most important 
things that I've had the opportunity to participate in as a 
member of the Board of Forestry is the public hearing process on 
these many rule packages that have come before the Board. And 
it's very clear that almost everybody believes that the most 
important step the Board can take is to establish this watershed 
analysis program. That one-size with these kind of rules just 
does not fit every situation. 

So, I think that to move forward and establish 
programs that deal with individual watersheds, and prescribe 
rules for those particular needs, those particular sites, taking 
into consideration cumulative impacts, is the way to go. 

That probably is the singularly most important 
thing that I've learned in this process. 

SENATOR HUGHES: Have you said this in Board 
meetings, or are you just coming up with this conclusive 
suggestion at this point in time? 

MR. DIXON: I would expect that I had probably 
said that somewhere in this process, yeah. 

SENATOR HUGHES: Then, if they didn't listen to 
you, what are you going to do? 

MR. DIXON: I think that you work with the 
members on the Board, and with the Department, CDF, to bring 
that forward. And I think that's happening. 

It hasn't been a situation where people aren't 
listening. 

And I certainly didn't mean to imply that I was 
the first or the only one to support watershed analysis. But I 



18 

think it will happen, and I think we'll be effective. 

SENATOR HUGHES: Thank you. 

Move. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Witnesses in support. Witnesses in opposition. 

Family? 

MR. DIXON: Senator, my wife is a school teacher, 
and she was unable to make it today. 

CHAIRMAN BURTON: You and Chesbro, huh. 

What did you get paid on the Humboldt County 
Board? What's the salary of a Supervisor on the Humboldt Board? 

MR. DIXON: About 50,000 a year. 

CHAIRMAN BURTON: San Francisco's got to have the 
worst. They get 28,000 and they deal with God knows what. 
That's why we're here. 

SENATOR HUGHES: Can we move it again, please. 

CHAIRMAN BURTON: Call the roll, please. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 
[Thereafter, SENATOR LEWIS 
his Aye vote, thus making the 



19 

final vote 5-0 for confirmation.] 

CHAIRMAN BURTON: Congratulations. 

MR. DIXON: Thank you, Mr. Chairman. 

CHAIRMAN BURTON: Robert Heald. Good afternoon, 
sir. 

MR. HEALD: Good afternoon, Chairman Burton, 
Members of the Committee. Thank you very much for the 
opportunity to appear here. 

My name is Bob Heald. I'm a registered 
professional forester. I have 27 years of experience in 
research and teaching on forest resources. I'm currently the 
Director of the Center for Forestry at the College of Natural 
Resources at the University of California at Berkeley. I have a 
Master's Degree and a Bachelor's Degree in forestry from UC 
Berkeley. 

I previously have been elected as a director for 
a local school district, a K-12 district, twice, and as a fire 
board member twice in our local area in El Dorado County. 

It's a privilege to be here. I've been 
reappointed by Governor Davis to this position, and I look 
forward to working as hard as I can to move forward in the 
future. 

I'd be pleased to answer any questions that you 
have . 

CHAIRMAN BURTON: What is a forester? 

MR. HEALD: A forester is a person in California 
who is actually registered by the State of California. It 
requires a combination of either four years of a Bachelor's 



20 

Degree from the University of California, and three years of 
experience/ and then passing a fairly difficult examination to 
be licensed by the state. 

CHAIRMAN BURTON: To do what? 

MR. HEALD: Foresters are trained to manage 
forest resources, natural resources. They cover a very broad 
range of activities. 

CHAIRMAN BURTON: It's an old profession? 

MR. HEALD: Yes, in this country, from Gifford 
Pinchot from late turn of the century. 

Many foresters are involved in activities that 
are completely unrelated to growing and harvesting of trees. 
They manage watersheds, deal with fire issues, a very broad 
range of activities. 

CHAIRMAN BURTON: And then the Independent Order 
of Foresters, do you have to be a forester to be in that? 

MR. HEALD: That's a different association 
entirely. It has nothing to do the profession. 

CHAIRMAN BURTON: They're just people who' re kind 
of dedicated — 

MR. HEALD: It's a civic organization. 

CHAIRMAN BURTON: — to trees and stuff. 

The questions that were asked of the earlier 
ones, and I don't want to deal with the temporaries, because the 
temporaries have been done, but about to immediately get the 
Board focusing on basically what the permanent regs are going to 
be, and hopefully strengthening the temporaries. 

Do you have a commitment? 



21 

MR. HEALD: Yes, I do. I believe the Board is 
currently engaged in hearings for the watershed assessment 
package. I believe Board members are committed. I'm certainly 
committed to putting that out as a regulatory notice package by 
the July meeting at the latest so that the public will have an 
opportunity to comment on it, so the Senators will see the 
character of that package. 

I believe the Board is prepared to also put 
portions — I hope the Board is prepared to put portions of the 
existing interim package into permanent regulation, particularly 
those dealing with the maintenance and management of road 
systems and watercourse stream crossings, which are important 
for fish and sediment values. 

CHAIRMAN BURTON: Senator Knight. One more shot 
at that joke. 

[Laughter. ] 

SENATOR KNIGHT: I'll try another one. When 
you're standing in a hole, don't did it any deeper. You didn't 
get that one either. 

Well, I got to ask the question. We talked about 
it before, Mr. Heald, but you've been identified with a 
quotation and indicating that, "one. which may even grow from the 
barrel of a gun exists for those persons and institutions which 
resist the socialist revolution and are hostile to or sabotage 
socialist construction, defined as enemies of the people." 

Your quotation was in your response justifying 
taking policies. You favorably compared the U.S. Constitution 
with Mao Tse Tung's Little Red Book of Quotations. 



22 

CHAIRMAN BURTON: Both of them were revolutionary 
documents. 

SENATOR KNIGHT: You're correct, Mr. Chairman. 

MR. HEALD: Yes, Senator. 

SENATOR KNIGHT: With different objectives. 

CHAIRMAN BURTON: Trying to overthrow the 
existing order. 

MR. HEALD: I certainly made no reference to the 
long statement that you made. 

I did make a statement at a committee hearing of 
the State Board of Forestry, which I was chairing at the time. 
It was one of those statements that, halfway out of my mouth, I 
wish I could have drawn it back, but I didn't. 

And its sole intent was to encourage the members 
of the public who were present to begin a productive dialogue on 
the issues of the agency's rules package, which was in front of 
us, which was fairly technical in nature and dealt with salmon 
protection and watershed assessment. 

It was by no means an attempt to demean the U.S. 
Constitution, which I revere and have taken many oaths to 
support. 

But I did say it, but not that long soliloquoy 
that you made. 

SENATOR KNIGHT: I assume we won't say it again? 

MR. HEALD: You can count on that one, sir. 

I would like to respond to one of your earlier 
questions that you asked several of the other members. 

I believe we also have an obligation to look at 



23 

several opportunities. Watershed assessment obviously doesn't 
just apply to forest land, and the State Board of Forestry and 
Fire Protection has no authority beyond commercial timber land 
and wildlands of the state. 

But we can encourage members of watershed 
communities/ whether they're private landowners, or counties, or 
cities, to cooperate in watershed assessment and come to a 
mutual understanding about how to move forward with protecting 
natural resources. 

I also think that we have the opportunity to 
recognize that private landowners make a variety of resource 
stewardship activities on their own. And we have not done as 
much as we could to recognize those. Some landowners have 
begun or completed habitat conservation plans with the National 
Marine Fisheries Services or U.S. Fish and Wildlife Service. 
And I believe those efforts have to be recognized in whatever 
sort of regulations that we provide. 

Some private landowners have also voluntarily 
taken upon themselves to get third party review and 
certification of their activities. I think the Board of 
Forestry and Fire Protection should explore the extent to which 
that achieves similar results as any regulatory package we might 
have. 

I think there's other things that we can do. 

SENATOR KNIGHT: So, what you're saying is, you 
also have to be facilitators between organizations such as the 
county, private landowners, Fish and Game, other organizations, 
and still run a fine line of not taking of land, but being very 



24 

much aware of the environment and the rights of people on their 
lands. 

MR. HEALD: Absolutely, Senator. There are many 
different ways to accomplish the same objective, and our job 
should be, in terms of policy, to make sure we recognize those 
that are accomplishing the objectives any way that they can and 
are willing to. So, I believe we should move forward with that. 

CHAIRMAN BURTON: The new, environmentally 
sensitive Senator Knight. 

SENATOR KNIGHT: I might be converted yet. 

SENATOR HUGHES: You have one of the best 
academic backgrounds for serving in this capacity. 

Do you find yourself oft times frustrated because 
your colleagues don't have the base of knowledge that you have? 
Do you give them service training to help to move your group 
along? 

MR. HEALD: Well, Senator, I have to admit that I 
often receive in-service training. 

SENATOR HUGHES: But that's not on the subject 
matter. That's on the dynamics of Board policy and process. Is 
that not true? 

MR. HEALD: That's correct, Senator. 

But a board with solely technically competent 
members doesn't really express the range of the public's 
interest and landowners' interest and the state. So, I find it 
very useful and positive that we have Board members from 
different backgrounds. You do learn from each other and from 
the public as they testify. 






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SENATOR HUGHES: Well, I'd like to put you out of 
your misery and move the nomination. 

CHAIRMAN BURTON: Witnesses in support. 
Witnesses in opposition. 

Family? 

MR. HEALD: My wife is in Arizona on vacation, 
where I will be later this evening. 

CHAIRMAN BURTON: Smartest one in the family. 

Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 
[Thereafter, SENATOR LEWIS 
his Aye vote, thus making the 
final vote 5-0 for confirmation.] 

CHAIRMAN BURTON: Congratulations. 

MR. HEALD: Thank you very much. 

CHAIRMAN BURTON: Andrew Marckwald. 

MR. MARCKWALD: Good afternoon, Senator Burton, 
Members of the Committee. Thank you very much for the 
opportunity to be before you today. 

I have worked on California environmental issues 



26 

for the past twenty-plus years, first as the Undersecretary of 
the Natural Resources Agency. I subsequently worked with the 
Environmental Defense Fund, and as a board member of the League 
of Conservation Voters. And for the past 15 years, as a 
principal in my company, California Environmental Associates, 
which works with companies and trade associations and 
universities in trying to assess and solve their environmental 
problems . 

I was nominated by Governor Davis as a public 
member in July of last year. I have worked first-hand, 
day-to-day, on environmental issues, and forestry issues are 
really a difficult, difficult nut to crack. The amount of 
regulation, the types of regulation, the ownership structure in 
the industry, the tools which have been applied so far are not 
working well, as the National Marine Fisheries testament to the 
struggle of the salmon. I don't think they're working well for 
the landowners. I don't think they're working well for the 
environmental interest. 

So, in endeavoring to undertake a new way of 
looking for new ways to create forestry regulations, I think 
it's really the joint effort of all the members on the Board now 
to try to find this better way. 

But in looking for it, we shouldn't deceive 
ourselves that we'll take one set of things which sound good, 
watershed assessment, cumulative impacts analysis, and not — 
and substitute it for prescriptive standards unless the people 
who really know what's happening on the ground can satisfy 
themselves that these changes are going to be ultimately 



27 

better with respect to sediment, to temperature, to fish 
survivability. 

And if we can do that, then this performance- 
based forest practices approach is going to be better than the 
prescriptive one. Can we get there? I don't know, I mean on 
the timeframe. 

I was the one who made the motion, and I will 
clearly make the motion again to get rid of the sunset and to 
ensure we have protections and enhanced protections in place, 
if, in fact, we're not ready to do a watershed package by that 
time. 

So, with those opening comments, I'd be happy to 
entertain any questions that Members of the Committee might 
have. 

CHAIRMAN BURTON: Are you involved in the Trinity 
River? 

MR. MARCKWALD: Involved — the Trinity, there 
are plans in front of us. 

CHAIRMAN BURTON: Does Byron Liedecker mean 
anything? 

MR. MARCKWALD: He does not. 

CHAIRMAN BURTON: I think he called me to support 
you. It should mean something. He's out to save the Trinity 
River. 

I think you commented on the main concern that I 

had. 

Senator Knight. 
SENATOR KNIGHT: No. 



28 

SENATOR HUGHES: Move it. 

CHAIRMAN BURTON: Witnesses in support. 
Witnesses in opposition. 

An awful lot of people here concerned about the 
Public Utilities Commission, aren't there. 

Do you have your family here at all? 

MR. MARCKWALD: My wife is hard at work in the 
great city of San Francisco today. 

CHAIRMAN BURTON: As she should be. 
[Laughter. ] 

CHAIRMAN BURTON: Which building's at 2151 
Pacific. 

MR. MARCKWALD: A brick two-story building on the 
right-hand side of the block, between something that would have 
never been built if you had been mayor in the '50s, and then a 
couple of Victorians on the downstream side. 

CHAIRMAN BURTON: Let me tell you, Pete. When I 
was a young man working at United Parcel, the two biggest stops 
were 2100 Pacific and 2100 Jackson. They were always I. Magnin, 
Joe Magnin, and Ransohoff. High line places for a high line 
neighborhood. 

Moved by Senator Hughes. Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 



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SECRETARY WEBB: O'Connell Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 
[Thereafter, SENATOR LEWIS 
his Aye vote, thus making the 
final vote 5-0 for confirmation.] 
CHAIRMAN BURTON: Congratulations. 

MR. MARCKWALD: Thank you very much. 

CHAIRMAN BURTON: Loretta Lynch. 

Members, it's my pleasure to introduce to us 
Loretta Lynch for a position on the Public Utilities 
Commission. She worked for the Governor's Office of Planning 
and Research. She was a partner in law firm headed by a dear 
friend of mine, John Keker. Clerked for Honorable Judge Dorothy 
Nelson of the Ninth Circuit, and was Special Consultant 
Litigator for Legal Aid Foundation in Los Angeles. 

And was described with derision as being a Burton 
person down in the Governor's Office, so that's why they moved 
her right into an area where she no longer takes my direction. 
We'll get it done quick before he pulls you back. 

[Laughter. ] 

MS. LYNCH: Thank you,- Senator; thank you, 
Senators. 

CHAIRMAN BURTON: And a good friend of our 
colleague, Johann Klehs. 

MS. LYNCH: I am privileged to be here as 
Governor Gray Davis' appointee to the California Public 
Utilities Commission. 



30 

I look forward to improving protection of 
California consumers while we enhance California's economy. I 
take seriously my responsibility to implement statutory mandates 
as well as legislative direction as a member of the Public 
Utilities Commission. 

I believe that there's a historic opportunity for 
the PUC to be on the same page as the Legislature, as well as 
the Governor/ as we tackle issues during this period of historic 
industry transformation in the telecommunications and energy 
industries. 

I welcome your questions. 

CHAIRMAN BURTON: Were you here on this, Senator? 
Come on up. 

SENATOR BOWEN: Thank you. I just wanted to take 
a couple of minutes to express my support for both President 
Lynch and Commissioner Wood. 

In the brief time that they've been at the Public 
Utilities Commission/ the ability of the Senate Energy, 
Utilities and Communications Committee to work collaboratively 
on issues where there is overlap between the responsibilities of 
the PUC and of the Legislature has been really extraordinary. I 
couldn't be more pleased with the level of communication and our 
ability to work together. 

I think it will serve all Californians as we deal 
with the difficult transformation from a regulated structure for 
many of our utilities to a competitive one, and the many complex 
issues that raises, and the kinds of balances that have to be 
dealt with, not all of which were anticipated at the time that 



31 

we did some of the — took some of the actions that led to 
deregulation. 

So, I strongly urge your confirmation, your vote 
to confirm both President Lynch and Commissioner Wood. 

I also want to emphasize that I think we are 
seeing a stronger commitment to consumer protection at the 
Public Utilities Commission, and that's very important because 
in a competitive market, the economic incentives to walk close 
to the edge are greater than in a regulated environment. And I 
think we have many Californians who are still quite confused by 
the newly, still relatively newly deregulated market. It's very 
important that we keep consumer confidence in our utilities. 

Thank you. 

CHAIRMAN BURTON: Thank you, Senator. 

We had a discussion on the phone about the deaf 
and disabled telecommunication program. What role should the 
deaf and disabled play in the operation of it, or in the 
direction to it? And then, the inside-outside; you know, 
whether to bring it all in under the civil service, or leave 
some of it or all of it out. 

So, could you comment on that, please? 

MS. LYNCH: Certainly, Senator. 

Last Thursday, the Commission passed the .2000 
DDTP deaf and disabled telephone program budget on a 5-0 vote. 
I had taken that budget originally off the Consent Calendar 
because the budget increased the staff from 36 to 70 positions, 
and I wanted to understand the increase as well as the program 
budget increase before I voted on it. 



32 

In doing so, I learned of SB 669, Senator 
Polanco's bill/ that was passed into law and signed by the 
Governor last year, which requires the Commission to report to 
the Legislature as well as the Governor on a transition program 
to bring the funding of the program in through the State 
Treasury. And the Public Utilities Commission has had several 
issues with other advisory committees in the past, prior to my 
tenure. I wanted to understand the workings of those issues as 
they relate to advisory committees, as they relate specifically 
to the DDTP program. 

I want to emphasize my support of the substantive 
DDTP program. We serve over 400,000 Californians in need of 
their services, and last year, the California Relay Program 
placed over 7 million telephone calls. And I applaud all those 
who are involved in providing the services. 

But I take seriously the mandates of SB 669, and 
therefore, prior to voting to pass the DDTP 2000 budget, I 
proposed a rule making in which we look at how we are going to 
comply as a Commission with SB 669 in bringing the program 
funding from an outside source and into the State Treasury. And 
both my draft rule making, as well as Commissioner Henry Duque's 
draft rule making — Henry is here in the chambers with me — 
are before the Commission for a vote probably the next 
Commission budget. 

So, I don't pre- judge how we should comply with 
the mandates of SB 669. I just recognize that the mandates are 
there. 

CHAIRMAN BURTON: I think the only mandate was to 



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get the money inside, and not who you hire to spend it, 
basically; is that right? 

MS. LYNCH: That was one of the mandates. 

It's been explained to me that by operation of 
the law, if the funds become state funds, then only state 
employees can actually administer them. And the breadth of 
that requirement is really what is on the table for the 
Commission to study. 

CHAIRMAN BURTON: Well, they would administer 
them, I guess, and I have no idea, would mean sending out the 
money, but they could send out the money to the people that are 
now doing the deal. 

In other words, if it ain't broke, don't fix it 
type theory. 

So, right now it's been run by the committee; 
right? 

MS. LYNCH: That's correct. It's a nonprofit 
foundation. 

CHAIRMAN BURTON: Right. How do they run it? 
What do they do? Somebody's doing work; right? 

MS. LYNCH: Yes. Actually, up until now, 
primarily the work has been contracted out to the telephone 
companies. And historically, that was primarily Pacific Bell, 
although other phone companies are also involved to date. 

But we are right at the period of transition from 
taking it away from particular phone companies, and one option 
is to provide a separate, independent structure to run the 
various programs. 



34 

Another option is to continue — 

CHAIRMAN BURTON: What do they do when they run 
the program? 

MS. LYNCH: The phone companies provide the 
operators that make the essential link between the person who is 
deaf on one end of the line, who is using the relay service, and 
then the hearing customer on the other end of the line. 

CHAIRMAN BURTON: It would seem to me that 
probably the phone company is better equipped to do that, you 
know, God forbid, than some state employees, unless they ran 
state phone. And that's what they do. They run telephones. 

MS. LYNCH: Well, certainly, I think it's 
anticipated that whoever administered the fund, the program 
would continue to contract with bonafide telephone companies in 
the State of California to provide the actual relay service. 

There are several other ancillary services 
involved in getting the equipment that enables each deaf person 
to use the phone service. 

CHAIRMAN BURTON: Geez, I hated it when they 
broke up the damn phone company. I'll tell you, life was 
simpler. Go down to Walgreens, buy yourself a phone. 

All right, the deal on the reverse directories. 
Now, they used to be, before your time, there were reverse 
directories. In fact, you could call Information and get the 
telephone number; you could do that. 

Now, all of a sudden, sometimes I get lucky, but 
you could lease from the phone company reverse directories, and 
political — before the days of computers — political campaigns 



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would do that. 

Now, according to the Voice of West, San 
Francisco's only home-owned newspaper, the San Francisco 
Chronicle , Pac Bell's asking permission to create a new reverse 



directory to let the customers look up a name or address if 
they've got the number, which is a little bit different than 
before. Because basically, I guess, with the other thing that I 
do not like, caller ID — who used to carry that bill; was that 
you? No, Teresa. Not Teresa; I mean Gwen. 

But anyway, or, God forbid, you're in the men's 
room somewhere, and there's a phone number. And then you could 
look it up. By just having a phone number, you could look it 
up. 

MS. LYNCH: That's a scenario I hadn't yet 
anticipated. 

CHAIRMAN BURTON: I mean, you know, "Honi soit 
qui mal y pense, " which again shows how eclectic we are. That 
means, "Evil to those who think evil of others." 

It seems that's a little sticky, that you could 
find out somebody's — there's a phone number, and all of a 
sudden, you could find out where somebody lives, and whatever. 
There's a lot of potential mischief and real danger in that. 
Not only on the, like, Steve Peace privacy issues, but it would 
seem to be like a very problematic thing. 

MS. LYNCH: I have serious privacy concerns about 
the proposal that is before the Commission in the form of an 
advice letter request. 

I also, as you recognized, Senator, know that 



36 

there are these kinds of reverse directories that do exist out 
there and on the Internet. 

I'd like to correct a mis impress ion left by the 
reporter in that article, which was that this was essentially a 
done deal in front of the Commission. 

One, it is not. 

Two, I have serious concerns about the process by 
which this request was made. It was made through . an advice 
letter request, which is usually relatively noncontroversial, 
rather than formal application before the Commission, which 
would then trigger public hearings and comment, and due process 
requirements . 

CHAIRMAN BURTON: What was the advice letter? 
They said, can this be done? 

MS. LYNCH: Correct. 

CHAIRMAN BURTON: So, the answer is yes, it could 
be done if the PUC decides to do it with a reg; right? 

MS. LYNCH: Well, the advice letter process is a 
staff recommendation generally to allow something to be done 
through the advice letter, which is a much more informal process 
than an application process. 

CHAIRMAN BURTON: So, staff could, in theory, by 
advice letter, give somebody the ability to do something that 
they can't do? 

In other words, an advice letter, you get an 
advice letter, kind of like the advice letter from the FPPC, 
where, you know, is this a violation of law if I take my 
daughter to the Democratic Convention and pay for it out of 



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campaign funds? 

So, they would ask, can we do this? And then the 
staff could say, well, there's nothing to prevent it, and then 
they could kind of do it? Is that what an advice letter is? 

MS. LYNCH: Not being familiar with the FPPC 
technical process, I don't want to make the exact comparison, 
but it's similar to that. 

However, in this case, I want to assure the 
Committee that that will not be done because there have been 
protests to this request. So that will — the request itself 
will come to the full Commission for a vote by each 
Commissioner. 

CHAIRMAN BURTON: Do you see a difference 
between — and I don't even know if they're still around — the 
old reverse directories that were basically by street address as 
opposed to by phone number? I kind of see a difference. 

MS. LYNCH: I definitely see the difference in 
terms of ease of access to this information, and how easy it 
will be for folks, on a wholesale basis, to get other folks' 
names and addresses on the basis of having their phone number. 

So, I intend to take a serious look when this 
comes before the Commission. I also intend to take a serious 
look at the process by which the project was requested. 

And in fact, in my book, it should go through a 
general application process, which would allow for public 
hearing and due process protections. 

CHAIRMAN BURTON: As I said, the phone company 
would not sell you the reverse, but I think you could lease it 



38 

for 30, 60 or 90 days, and then you could always renew it. 

In our office, we would have one, but I think the 
address, to me, is somewhat different from the phone number, but 
maybe not. 

Senator Knight. 

SENATOR KNIGHT: Yes, Chairman, I would agree 
with you, that if this reverse directory would go through, the 
numbers on men's room wall would increase ten- fold. 

I have one other question. The number of phones, 
and the number of requirements for fixed phones and mobile 
phones is going to increase dramatically over the next number of 
years . 

Is there a plan in place, or are you working on a 
plan to control disruption associated with changing area codes? 

MS. LYNCH: Yes, Senator, we are. 

The Governor had requested from FCC Chairman 
Cannard last August that California obtain additional authority 
in order for us to conserve our telephone numbers in 
California. 

As you probably know, in 1997, California had 13 
area codes. Now we have 26, and it's projected that we'll have 
4 area codes by the end of 2003 unless we do something about 
this. 

And I firmly believe, along with the Governor, 
that it's time to stop treating phone numbers as worthless. In 
fact, they're worth quite a bit. 

So, the PUC, after California obtained additional 
authority from the federal FCC, has moved aggressively to start 



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number conservation measures. And in fact in March, we 
published a study of the remaining unused phone numbers in the 
310 Area Code. 

As many Senators who are from the Los Angeles 
area know, the PUC last year was just about to implement an 
overlay in the 310 Area Code because of the assumption that we 
were out of phone numbers. And in fact, the staff analysis 
shows that almost 3 million unused phone numbers exist in the 
310 Area Code, out of 7.9 million numbers over all. 

I believe that before we ask anyone in California 
to change their area code, we should first — we, the PUC — 
should first be able to assure them that all the unused numbers 
actually get used up before we require small businesses or 
residential customers to go through the expense and the hassle 
of changing an area code. 

So, we are now on the path of actively conserving 
phone numbers. 

SENATOR KNIGHT: But I still didn't hear anything 
about a dedicated plan to control the area codes and the 
reassignment of area codes. 

MS. LYNCH: Certainly. 

The first thing we've done is, two meetings ago, 
so in March, the PUC instituted what's called fill rate 
requirements, so that each telephone company receives a block of 
numbers, a block 10,000 numbers currently. And before they can 
line up again to receive 10,000 more numbers, they have to fill 
75 percent of those numbers before they come back. 

So, the first thing we did was say, "Before you 



40 

come back for more, you have to show us that you used the ones 
we gave you first." 

The second thing we've done is implement — when 
we started in the 310 Area Code, and we'll be studying doing it 
statewide, implement what's called number pooling, so that phone 
companies receive their numbers not in 10, 000-number blocks, but 
in 1, 000-number blocks. Then we'll take all those unused phone 
numbers and put them back in a pool to be reallocated out to new 
phone companies or phone companies that can demonstrate growth. 

And in fact, we've started our pooling trial in 
the 310 Area Code, and it's been quite successful so far. 

We're limited in how often and how far we can go, 
area code by area code, in implementing pooling by the FCC. The 
FCC wanted us to try it in one area code first, demonstrate 
success, and then sequentially do it in other area codes. 

So, the 415 Area Code is up next for pooling, and 
then the 714 Area Code this coming year. So, we'll be pooling 
in those area codes which are at risk of exhaustion. 

SENATOR KNIGHT: I guess my question goes to 
providing some kind of planning direction to business and home 
businesses who have stationery, cards, et cetera, all kinds of 
things with their phone number on it, including area code. And 
if they can have some indication as to when they might be 
changing area codes, they can, you know, correspondingly buy new 
stationery or whatever. 

MS. LYNCH: Absolutely. 

The FCC mandates that once an area code is 
projected to exhaust, meaning use all of its phone numbers, that 



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the PUC put out a general notice that we're going to change an 
area code — and how we're going to change it specifically, down 
to exactly where the line is drawn if we're going to split that 
area code — many months in advance. Then, two or three months 
right before that area code changes, we send out another notice 
to all consumers. 

So, we are in the process of those area codes' 
that are projected to exhaust. We will be sending out 
appropriate notices far enough in advance. 

However, before we even send out those notices, 
my view is that we need to ensure, by looking at the facts, 
that, in fact, the assumptions are correct. 

And we saw in the 310 Area Code that, in fact, 
our assumptions were not correct, and that there were millions 
of unused numbers still available. 

CHAIRMAN BURTON: Senator O'Connell. 

SENATOR O'CONNELL Thank you, Mr. Chairman. 

I've had an opportunity to communicate with both 
Ms. Lynch and Mr. Wood on the issue of rate regionalization, 
specifically as it applies to water and water delivery, where, 
when you look at some of the very small communities in our 
state, because of economies of scale and the cost of delivering 
water, in this case, it's quite expensive. Some communities 
have seen a four, five, six-fold increase in water almost 
overnight. 

And I know that you're looking at proving some 
flexibility for some of the water purveyors, water delivery 
systems throughout the state for this rate regionalization. And 



42 

I certainly appreciate your willingness to look at that as one 
potential option, so that we don't disproportionately cost some 
of these smaller communities an exorbitant amount of money with 
some of the increased water costs throughout the state. 

I appreciate that, your efforts and that of the 
Commission, in the past. 

Thank you. 

MS. LYNCH: Thank you, Senator O'Connell. 

I take my job as a consumer myself. I am not 
from these industries. And so, the first question I ask is, 
what's the impact on the bill? 

CHAIRMAN BURTON: What's in it for me? 

MS. LYNCH: Not me in particular, but most 
Californians' bills. 

CHAIRMAN BURTON: The generic me. 

Senator Hughes. 

SENATOR HUGHES: How did Pac Bell come up with 
the charge of 95 cents per call in the use of the reverse 
directory? Do you have any idea? 

MS. LYNCH: You know, I don't. I have not taken 
a look at the specific support for that, Senator. 

CHAIRMAN BURTON: For what? 

SENATOR HUGHES: Per call for the use of the 
reverse directory. 

CHAIRMAN BURTON: You mean for Information? 

SENATOR HUGHES: That's right. 

MS. LYNCH: No, for this reverse directory 
proposal, to access the reverse directory. 



43 

SENATOR HUGHES: Yes. 

MS. LYNCH: Senator, I don't know. 

CHAIRMAN BURTON: What is a 4-1-1 call now? 

MS. LYNCH: The directory assistance. 

CHAIRMAN BURTON: Yes, how much? 

MS. LYNCH: Actually, I believe that the 
Commission, prior to my time, has increased the price for 
directory information beyond the 25 cents. 

CHAIRMAN BURTON: One time they gave you five for 



zip 



How much? 



Anybody here from Pac Bell? What's the charge? 



FROM THE AUDIENCE: It's 4 6 cents, Senator. 

CHAIRMAN BURTON: How'd they come up with that? 

FROM THE AUDIENCE: It's priced at our cost, what 
it costs to provide it. 

CHAIRMAN BURTON: Not making a dime. 

SENATOR O'CONNELL: They had to cover the cost of 
that new baseball stadium in your city. 

CHAIRMAN BURTON: Exactly. 
[Laughter. ] 

SENATOR HUGHES: What are your concerns for 
privacy in the utilization of the reverse directory? Are you, 
as the PUC, making any demand that we have some privacy involved 
there at all? Or, do you feel it's within your jurisdiction? 

MS. LYNCH: In terms of the reverse directory 
proposal . 

SENATOR HUGHES: That's right. 



44 

MS. LYNCH: Certainly, the PUC theoretically 
could work with Pac Bell to ensure that there's additional 
privacy. 

SENATOR HUGHES: What do you intend to do as 
President regarding the privacy issue? That's what I should 
have asked you to begin with. 

MS. LYNCH: Certainly. I will answer honestly, 
Senator . 

I have not taken an in-depth look at this 
proposal because it has gone through a very informal process 
that wouldn't naturally always come up to the Commission. 

So, at this point, I'm just starting to dig into 
it. 

I have serious concerns. First, I want to 
recognize that these kinds of directories are out there. It's 
not that I can stop that. 

SENATOR HUGHES: Yes, I know, but the fact that 
is it or is it not true that you have to put a notification in 
the phone bill that these directories are out there before they 
use them? That Pac Bell has to enclose that in your bill? I 
want to know. 

MS. LYNCH: That's the proposal that's currently 
going through the advice letter process, that Pac Bell would- 
notify folks -- 

SENATOR HUGHES: And that's usually how they do 
it. They stick it in with your phone bill. I throw away the 
rest of the junk when I make out the check to pay my bill. 

Is that real notification to people? That's what 



45 



concerns me. 

MS. LYNCH: Given that it took me forever to 
actually block my caller ID, because I kept throwing away those 
notices, I know as a practical personal matter, I don't think 
that should be the end of the story. 

SENATOR HUGHES: So, you will tighten that up and 
see that it's done in a more informative way, whether we have to 
have radio or tv advertising, or something like that? Because 
it annoys me when I get all the junk in with the bill. I just 
want to pay the bill and get it over with. 

But that is a very threatening thing, especially 
for people who live alone, or people who are threatened, and 
what have you. 

MS. LYNCH: Absolutely, Senator. 

I can't assure you that I'll do it by myself, 
because it takes three votes of the Commission to pass — 

CHAIRMAN BURTON: That's why you're the 
Commission President. 

SENATOR HUGHES: It only takes a leader to move 
it in the right direction. 

MS. LYNCH: But I am going to take a serious look 
at the proposal and make sure that we have the appropriate 
procedural safeguards as we all look at it, so that all members 
of the public can come in and talk to us about their privacy 
concerns and their general concerns about this proposal. 

SENATOR HUGHES: Thank you. I appreciate that. 

CHAIRMAN BURTON: Getting back just quickly to 
the area codes. You might have gone over this when you talked 



46 

to Senator Knight and I didn't catch it. 

But I read somewhere where guys used to get, 
like, phone numbers in 10,000-piece blocks. 

Who got them, and they're just sitting on them 
and didn't use them? Where were these 3 million unused 310 
numbers? Somebody had them? Can they sell them like Giant 
tickets, or what? 

MS. LYNCH: They can't sell them like Giant 
tickets, although those are hard to come by. 

CHAIRMAN BURTON: I've got four. We can do 
business . 

[Laughter. ] 

MS. LYNCH: There's really a variety of factors 
that led to various phone companies having a lot of unused phone 
numbers. One is, there's been an explosion of phone companies 
doing business in California. So, as a phone company comes in, 
they pick up 10, 000 numbers every place that they do 
business . 

CHAIRMAN BURTON: Whether they've got 10,000 or 
two subscribers. 

MS. LYNCH: Absolutely. And it's not really the 
phone company's fault. The FCC mandated that we give out 
numbers in 10, 000. blocks . So, we had to ask for special 
authority to give out numbers in 1,000 blocks. 

CHAIRMAN BURTON: I would think that probably the 
Congress would pass legislation. It's got to be a problem 
everywhere. It's got to be a problem in Florida, Texas, where 
ever there's growth. 



47 

Somebody raised the issue, and maybe it was 
Senator Bowen, that if you had special phone numbers/ or a 
special area like for cell phones, almost that alone would solve 
it. Cell phones and faxes eat up an awful lot of the numbers. 

I think in L.A. itself, except downtown L.A., 
there is no 213 Area Code any more. 

MS. LYNCH: Well, the 213 Area Code is quite' 
circumscribed. I believe it's a ten-block square area now. 

CHAIRMAN BURTON: But a lot of the car phones and 
faxes down there are the — because there cannot be as many 
phone numbers in 213 as there are in 415, or 310, or any of the 
others. 

I think 805, did yours change yet? And 805 »s 661 
now; right? 

SENATOR KNIGHT: That's right. 

CHAIRMAN BURTON: Somebody said that business 
would go nuts. Have you guys ever looked at that? 

MS. LYNCH: We are just starting to look at this 
right now. That is one option, to have what they call a 
technology overlay. 

However, California does not have the authority 
from federal government to implement a technology overlay. We 
have asked. The PUC has asked, and Governor Davis has asked, 
the FCC to give California that authority, but we don't have it 
yet. 

CHAIRMAN BURTON: Again, maybe they ought to 
address it to Feinstein, Boxer, Dryer, whoever, but to the 
Congress, because it's a problem for us. But I think in any 



48 

growth state, it's got to be a problem. It's just exacerbated 
here, but to give locals the ability to do something. You know, 
it's nuts. 

I'm waiting for — I guess San Francisco will 
always be 415 maybe, but I don't know what the hell's happening 
anywhere else. 

MS. LYNCH: We're going to do our best to make 
sure that San Francisco's always 415. 

CHAIRMAN BURTON: That's why we've got you there. 

SENATOR KNIGHT: Why? 

CHAIRMAN BURTON: Because she lives there. 

SENATOR KNIGHT: Oh, I just wondered. 
[Laughter. ] 

MS. LYNCH: But Senator, to answer your question, 
Texas has gone to 10-digit overlays. So, they just overlay so 
that new customers get a different area code. So that if you 
got a fax in your home, it may well be a different area code 
than your phone. 

And that's what so many customers in the 310 Area 
Code objected to, and that's why the Governor petitioned the FCC 
for additional authority so that we can prevent that from 
happening. 

We may still need to split, but the PUC, at the 
Governor's request, had shifted direction from overlays to 
aggressive number conservation. 

CHAIRMAN BURTON: I think that is good. I would 
think, if I had my choice between keeping 415, and if I was dumb 
enough to have fax in my home, having different area codes for 



49 

the fax, then having the same area code for the fax as my home, 
but it's now 717. 

Santa Cruz, for Christ's sake, has got two of 
them now. It was 408, and now it's 831. 

MS. LYNCH: Yes. 

CHAIRMAN BURTON: I mean, it's nuts. 

SENATOR KNIGHT: One question. When you indicate 
that San Francisco will not change, does that indicate that San 
Francisco will not increase in population? 

MS. LYNCH: No, not at all, but I believe, just 
as we found in the 310 study, that we're going to find a lot of 
unused numbers in 415, just as we will 714 and 949. 

CHAIRMAN BURTON: If part of 415 changes, it's 
the northern part of my district, not the city. The city. 

SENATOR KNIGHT: Okay. 

CHAIRMAN BURTON: Not up the country, the city. 

SENATOR KNIGHT: I know where it is. 

CHAIRMAN BURTON: Witnesses in support, briefly. 
Name, rank and serial number. 

MR. WHITE: Mr. Chairman and Members, John White, 
Center for Energy Efficiency and Renewable Technologies, in 
support. 

MR. SMUTNY- JONES: Thank you, Mr. Chairman, 
Senators. Jan Smutny- Jones from the Independent Energy 
Producers, and we would urge confirmation. 

Thank you. 

MR. CARTER: Art Carter, representing the 
California Pipe Trades Council, and the State Association of 



50 

Electrical Workers, and the Sheet Metal Workers Union, in 
support of a very intelligent and effective leader for the PUC. 

MR. BALGENORTH: Bob Balgenorth, State Building 
Trades, representing 200 construction unions. We're in strong 
support of Loretta Lynch. 

MR. MONAGAN: Michael Monagan, on behalf of the 
Calpine Corporation in very strong support. 

CHAIRMAN BURTON: Any opposition? 

SENATOR HUGHES: Move. 

CHAIRMAN BURTON: Any relatives in the audience? 

MS. LYNCH: Being from an Irish Catholic family, 
I do have relatives in the audience. 

My mother, Mary Lynch, is here from Independence, 
Missouri. My sister, Cecilia Lynch, and her family. My 
brother-in-law, Tom Warnke. And my niece and nephew, Bridgette 
and Aidan Warnke, are here. 

CHAIRMAN BURTON: Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES-: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 
[Thereafter, SENATOR LEWIS 
his Aye vote, thus making the 



51 

final vote 5-0 for confirmation.] 

CHAIRMAN BURTON: Congratulations, Loretta. 

MS. LYNCH: Thank you. 

CHAIRMAN BURTON: Carl Wood. 

MR. WOOD: Mr. Chairman, distinguished Senators, 
thank you very much for inviting me to appear at this 
confirmation hearing. 

My name is Carl Wood. I was appointed by 
Governor Gray Davis to the Public Utilities Commission last 
June, and took office on June 21st. So, I've been serving for 
approximately ten months so far. 

I'm an industrial maintenance electrician by 
trade. I have worked in the steel industry for about ten years. 
I've worked in the utility industry as a power plant electrician 
for about six years. 

I served as the head of a local union in that 
industry for about 11 years, and then went on national staff for 
the Utility Workers Union, where I served as the National 
Deregulation Coordinator for that union. 

In addition to those duties, I also served as an 
officer of the California Coalition of Utility Employees, 
participating in and representing that organization around 
regulatory issues. 

So, I come to this position with a background 
both as someone who has done the work hands-on, who has actually 
carried tools in the industry, but also someone who has both 
represented workers in the industry, dealt with some of the 
companies, and also dealt with regulatory issues as they've come 



52 

up in this very rapidly changing industry. 

Much of the industry that we regulate in energy, 
both electricity and gas, and telecommunications, even in water 
and in transportation, have, over last 20 years, and to an 
increasing degree in recent years, undergone a transformation 
from traditional cost-of-service regulation to the introduction 
of various forms of competitive incentives, and which are 
typically characterized as deregulation, but don't always really 
mean deregulation. Sometimes they just mean restructuring and 
introduction of different regulatory mechanisms. 

In any case, this process has many times left 
consumers in the dust. It has, on the one hand, brought certain 
benefits in certain industries to consumers. Unfortunately, 
more for the larger consumers than for the small consumers, but 
there has also been, particularly we see in the 
telecommunications industry, the growth of various abuses 
against small consumers in particular. The growth of slamming 
and cramming, and other forms of unprincipled — 

CHAIRMAN BURTON: I know slamming. I've been 
slammed. 

What's cramming? 

MR. WOOD: Cramming is the addition of 
unauthorized charges to one's telephone bill. It's done, either 
through misrepresentation, as when someone is asked, say, to 
sign a card or to respond to a phone call, and then gets a 
service that they didn't think they were getting. Or sometimes 
it's done just outright fraudulently and with no contact with 
the consumer. 



53 

CHAIRMAN BURTON: Do you find both slamming — 
when I was slammed, it was some God-knows-who company in 
Atlanta, Georgia, became my long distance carrier. 

Do you find that slamming and cramming is more 
with, for want of a better word, Johnny-come-latelys, as opposed 
to Pac Bell, General Telephone? Is it the new entries? 

MR. WOOD: I think there's a continuum. There 
are large companies who engage in slamming, for example, 
especially through contracted companies that they hire to make 
their calls for them. 

There are lots of these Johnny-come-lately, or 
fly-by-night outfits that do the same thing. 

CHAIRMAN BURTON: Let's assume there was a big 
company, and Pac Bell's big, but I don't know if they would fit 
in this type thing, so they would hire somebody to call and get 
them customers, like maybe in Novato, which is why they have 
General Telephone, God only knows, when they're surrounded by 
Pac Bell. 

Then maybe that company gets a percentage, if 
they you get new accounts, or they get you this, they get paid 
on a percentage basis, and then they just start kind of like 
phoney voter reg. slips, or something? 

MR. WOOD: That is one of the forms of slamming 
and cramming that takes place, yes. 

CHAIRMAN BURTON: Thanks. 

MR. WOOD: Anyway, I don't want to go on at great 
length with my statement. I'd like to open myself up for 
questions from the Committee. 



54 

CHAIRMAN BURTON: Why don't you comment a little 
bit on the questions that we hit on. Do you subscribe to 
Loretta's comments on the questions we asked about the area 
codes and the reverse directory stuff? 

MR. WOOD: Well, President Lynch is a tough act 
to follow. But I'll try to add just a couple of comments. 

One is on -- like her, this reverse directory 
issue just came to my attention in the last couple of days, 
basically. I read the same Chronicle article that you did. 

As Commissioner Lynch pointed out, the 
application didn't go through the more formal procedure that 
exists in the commission, but rather through an advice letter. 
Therefore, it didn't come before us. 

CHAIRMAN BURTON: Which raises a question we 
probably should have asked Loretta. 

Maybe you'd better take a look at the type of 
stuff that can be done by advice letters. 

I mean, conceivably, if a reporter hadn't gotten 
ahold of this, you would have had a process out there that, 
somehow, you would had to try to pull back. So, you may want to 
try to have some process where, when somebody gets an advice — 
I don't know how your bureaucracy works, but if it wasn't for 
some enterprising reporter who probably got tipped off by, you 
know, Sylvia Siegal's niece, or something, that you could have 
ended up with this as a done-deal. 

MR. WOOD: With all due respect, I think it's 
unlikely that, in this case, that would have happened. 

Our staff — I wouldn't be surprised if our staff 



55 

1 was the source of the tip to the reporter. 

2 CHAIRMAN BURTON: It shouldn't take a tip to the 

3 reporter to have something. 

4 In other words, I don't know what it is, but I 

5 think it's just a suggestion that you may want to take a look at 

6 whatever it is that advice letter process, to see something as 

7 big a deal as this doesn't just go through because some staff 

8 guy said, "Well, yeah, I guess that one's all right." 

9 MR. WOOD: Yes, and I agree with that. Even 

10 things where there is not some sort of outside notification, 

11 frequently someone within the Commission, including — it could 

12 be a Commissioner will take notice of an issue that comes up and 

13 want to see it scrutinized more formally. 

14 And I think certainly, in this case, it needs a 

15 great deal of formal scrutiny. 

16 CHAIRMAN BURTON: Just take a look at it. 

17 That'll give Loretta something to do. 

18 MR. WOOD: Yes. She's a very capable 

19 administrator. 

20 I share the great concern over privacy issues, 

21 and also I note that this is -- the reverse directories are not 

22 a completely new invention. There is some experience in the 

23 world with reverse directories. 

24 But I think that one of the reasons there's a 

25 need for a formal proceeding, that if we ultimately decide to 

26 allow Pacific Bell to go forward with this, and I don't grant 

27 that as a done-deal by any means, I think there has to be a 

28 great deal of careful attention given to the protections for 



56 

consumers that will surround the implementation of this, 
including appropriate notification that's actually effective, 
rather than just cursory, and an assurance that people will not 
have their phone numbers connected with their names without 
their positive assurance and confirmation. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Sometime ago there was an 
increase in my phone bill associated with what they call Gore's 
tax, providing for Internet service within the school. 

CHAIRMAN BURTON: That was proposed actually by 
Jeb Bush in Florida. 

[Laughter. ] 

SENATOR KNIGHT: Whoever instituted it, how did 
that happen? 

MR. WOOD: That was instituted before I was on 
the Commission, so I don't know the origins of it. 

There's a program that is in place to provide — 

SENATOR KNIGHT: How do you increase the tax bill 
like that without any approval from Congress or somebody? 

MR. WOOD: I'm sorry, but I can't answer that, 
because I don't know the origins of the program. I don't know 
how it came into existence. 

SENATOR KNIGHT: Nobody does. 

CHAIRMAN BURTON: We have this guy named Ray 
Haynes that puts this stuff out. 

[Laughter. ] 

MR. WOOD: He was my State Senator until a couple 
weeks ago. 



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CHAIRMAN BURTON: Let's get in, because you're an 
utility guy. What about the IOUs and the stranded costs? 
What's going to happen with this whole dereg thing as far as 
electric utilities, stranded costs, whether or not the CTC's 
going to expire? Are they going to get the cost? Are rates 
going to go up or down? 

MR. WOOD: Well, the issue of stranded costs, I 
think, was settled with AB 1890, and so to a considerable 
degree, that is, I believe, off the table. The mechanisms are 
in place for recovery. 

CHAIRMAN BURTON: Do you think they'll recover 
them before the CTC expires? 

MR. WOOD: I think — well, of course San Diego 
Gas and Electric has already been through their transition 
period and has recovered what's authorized. 

I think that the other utilities will. PG&E and 
Southern California Edison will essentially recover the core of 
what they're entitled to under AB 1890. 

In other words, I don't think this is going to be 
a big continuing issue. There are continuing issues before the 
Commission in terms of implementing various aspects of it. 

So, in some respects,' it's not a completely 
settled matter, but the largest part of it is done. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Move the nomination. 

CHAIRMAN BURTON: Witnesses in support, briefly. 
Senator Speier. 

SENATOR SPEIER: Mr. Chair and Members, I 



58 

actually was supposed to be here to introduce the 
Commissioner-select to you, and I'm late. I apologize for that. 

I had the opportunity recently to spend two weeks 
on a trip with Mr. Wood. And while the length of our 
association is not long, I can suggest to you that we could not 
have a more intelligent voice on the PUC than him. 

I am particularly impressed with his knowledge 
base, with his fairness, and frankly, with his initiative, which 
has already shown itself by his effort to bring a consumer Bill 
of Rights to the PUC for consideration. 

I think that he is a real find for the PUC, will 
be an activist. And as the role of the PUC is really to be 
there to review rates and to make sure that rates are fair, and 
equitable, and representative of the need of the industries that 
are regulated, I think he will provide that kind of leadership. 
I think he'll be a great intellect on that board. 

With that, I would urge your support. 

CHAIRMAN BURTON: Thank you, Senator. 

Other witnesses in support. 

MR. SMUTNY- JONES: Jan Smutny- Jones with the 
Independent Energy Producers. 

.We, too, would encourage the confirmation of 
Commissioner Wood. We find him — while we sometimes disagree, 
we always find him very thoughtful and accessible. 

Thank you. 

MR. KELLOGG: Jim Kellogg, representing the Pipe 

Trades . 

I knew you didn't want to hear from me twice 



59 



today, so I'm here on behalf of both Loretta and Carl. I think 
that these are the two most brilliant appointments the Governor 
has made. 

CHAIRMAN BURTON: Right after some of the 
appointments to the Transportation Commission. 

MR. CARTER: Art Carter, representing the 
Electrical Workers and the Sheet Metal Workers, in strong 
support of a good labor person. 

MR. MONAGAN: Mike Monagan again, on behalf of 
Calpine Corporation, in strong support. 

CHAIRMAN BURTON: Witnesses in opposition. 

Hearing none, do you have family with you? 

MR. WOOD: Yes, I do. My wife has come with me 
to Sacramento. Her name is Ann. 

CHAIRMAN BURTON: Senator Hughes has moved. Call 



the roll. 



SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 
[Thereafter, SENATOR LEWIS 
his Aye vote, thus making the 
final vote 5-0 for confirmation.] 



60 

CHAIRMAN BURTON: Thank you and congratulations. 
MR. WOOD: Thank you, Senators. 

[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 5:17 P.M.] 
--00O00 — 



61 



CERTIFICATE OF SHORTHAND REPORTER 



I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and ' 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 



< 



,:P / day of 



,o» 



(/ 




, 2000. 



V^§VE-LYN J.^rfxZAK/ \ 
/Sho r t hand/Repo r%e r 



395-R 

Additional copies of this publication may be purchased for $3.25 per copy 
(includes shipping and handling) plus current California sales tax. 

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1020 N Street, Room B-53 

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Make checks payable to SENATE RULES COMMITTEE. 
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% ooo 
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^HEARING 

SENATE^RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUMENTS DEPT. 

MAY 2 2 2000 

SAN FRANCISCO 
PUBLIC LIBRARY 



^,«EA,' 5 /«.^^«- 



STATE CAPITOL 

ROOM 112 

SACRAMENTO, CALIFORNIA 

MONDAY, MAY 1,2000 
3:37 P.M. 



396-R 



SENATE RULES COMMITTEE 



STATE OF CALIFORNIA 



HEARING 



9 
10 
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13 
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15 
16 
17 
18 
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20 
21 
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STATE CAPITOL 



ROOM 112 



SACRAMENTO, CALIFORNIA 



MONDAY, MAY 1, 2000 



3:37 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



11 



APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

SENATOR JACK O'CONNELL 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

ALSO PRESENT 

LEONARD MUNOZ, Member 
Board of Prison Terms 

TINA DUNLAP, Staff Council 
Board of Prison Terms 

SENATOR JOHN VASCONCELLOS 

SENATOR RICHARD POLANCO 

WENDY TAYLOR 

California Attorneys for Criminal Justice 

RICHARD GOODMAN, Private Citizen 
Oakland 



Ill 
INDEX 

Page 
Proceedings 1 

Governor ' s Appointees : 

LEONARD MUNOZ, Member 

Board of Prison Terms 1 

Statement by CHAIRMAN BURTON re: 

Request by SENATORS POLANCO and 

VASCONELLOS that Committee Take No 

Action This Week 1 

Background and Experience 1 

Questions by CHAIRMAN BURTON re: 

Amount of Time Spent on Each Case 2 

Number of Cases Heard Per Hearing 3 

Advance Notice of Hearings 3 

Familiarity with Case Background 4 

Length of Hearings 5 

Preparation of Decisions 6 

Did Panel Read Court Order in 

Rosenkrantz Case 7 

Prior Notification, or Lack Thereof, of 
Rosenkrantz Court Order 8 

Advice Received from Board Counsel 8 

Considerations Board Takes into 

Account in Determining Suitability 

For Parole 9 

Determining Factors for Denying Parole in 
Rosenkrantz Case 11 



IV 

Recidivism Rate for Murder 11 

Board's Ability to Act Arbitrarily 12 

Definition of Twenty to Life 14 

Use of Alternate Punishment and Drug 

Treatment Programs for Technical 

Violations 16 

Responsibility for Revoking Parole 17 

Request to Provide Rules Committee with 

Update on Armstrong ADA Decision 17 

Sufficiency of Rehabilitation in 

Granting Parole Date 18 

Hypothetical Similar to Rosenkrantz But 

Without Automatic Weapon Used 18 

Questions by SENATOR LEWIS re: 

Governor's Unofficial Policy of 

Overturning Board's Recommendations 

for Parole 20 

Impact of Governor's Actions on 

Board 21 

Questions by SENATOR KNIGHT re: 

Rate of Recidivism for Murderers 21 

Number of Cases Heard Per Session 23 

Automatic Denials 23 

Questions by CHAIRMAN BURTON re: 

Time Constraints on Inmates during 

Parole Consideration Hearings 24 

Hearings at Front era 24 



Questions by CHAIRMAN BURTON of TINA DUNLAP, 

Staff Counsel, Board of Prison Terms 26 

Employment Background 26 

Familiarity with Rosenkrantz Court 

Order 2 6 

Advice to Hearing Panel on Court Order 27 

Duties of Staff Counsel 28 

Staff Counsel at the Prison during 

Rosenkrantz Parole Hearing 28 

Advice to Board Members on ADA 29 

Chief Counsel to Board 29 

Statements by SENATOR JOHN VASCONCELLOS 

Urging Opposition to Confirmation 3 0' 

Statements by SENATOR RICHARD POLANCO 

Urging Opposition to Confirmation 32 

Questions by SENATOR KNIGHT re: 

Definition of Twenty to Life 34 

Testimony of Victims during 

Parole Consideration Hearings 34 

Questions by CHAIRMAN BURTON re: 

Rosenkrantz Found Suitable for Parole in 

1996, but Board Decision Overturned by 

Internal Board Review 35 

Response by MR. MUNOZ 35 

Response by MS . DUNLAP 3 6 

Request for Exactly What Information 

Review Committee Used to Overturn 

Original Parole Eligibility Decision 38 



VI 



Witnesses in Opposition: 

WENDY TAYLOR 

California Attorneys for Criminal Justice 38 

RICHARD GOODMAN, Private Citizen 

Oakland, California 40 

Termination of Proceedings 45 

Certificate of Reporter 46 



P-R-O-C-E-E-D-I-N-G-S 
— 00O00 — 

CHAIRMAN BURTON: All right, Governor's appointee 
appearing, Leonard Munoz, Board of Prison Terms. 

Come up, sir. 

Senator Polanco and Senator Vasconcellos have 
asked that after the hearing today, that we take no action, but 
we have time to come back next week and take a vote pending new 
information that the two Senators were looking for. The drop 
dead date, I think, is May 20th, so we have no time constraints. 

Mr. Munoz, please. 

MR. MUNOZ: Thank you for having me here today, 
Mr. Chairman. Good afternoon, Senator Hughes, ladies and 
gentlemen. 

I will be brief in telling you a bit about 
myself. I was born November 6, 1943, in Phoenix, Arizona. My 
parents are U.S. born citizens of Mexican extraction who worked 
in the agricultural industry in the Phoenix valley. 

They brought the family to the Golden State in 
1946,. and I was raised in the Boyle Heights section of East Los 
Angeles. 

I have five brothers and sisters, numerous nieces 
and nephews. I have been married to my one and only wife, Celia 
Munoz, for 32 years, and we have two children. My daughter, 
Melanie, is a teacher, and my son, Leonard Greg, is a student at 
Pasadena City College, aspiring to become a paramedic soon. 

I have been a public servant almost all of my 
life, almost all of my adult life. I served my country in the 



United States Marine Corps, with a tour of duty in Vietnam as an 
infantryman. 

After an honorable discharge, I joined the LAPD, 
and I served the L.A. community for 30 years. During that time, 
I also served my residential community in the Whittier area by 
being elected to the Los Nietos School Board. I served from 
1985 to 1989, the last two years as President of that Board. 

In addition, my last five years on the LAPD, I 
served the rank and file police labor force of the department 
after being elected as a Director of the L.A. Police Protective 
League. 

During my time in the Marine Corps, during my 
service with the police department, during my four-year term on 
the school board, and during my five years as a labor official 
with the L.A. Police Protective League, I established a 
reputation for fairness, honesty, and integrity. I bring those 
qualities with me to the Board of Prison Terms. I bring those 
qualities to you and the people of California. And also of 
equal importance, I bring those qualities to the lifer inmates 
who come before me at parole consideration hearings, all of whom 
I will treat and all of whom I have treated with dignity and 
respect. 

Thank you. 

CHAIRMAN BURTON: How much time do you spend on 
each case prior to the hearings? 

MR. MUNOZ: In preparation, sir? 

CHAIRMAN BURTON: Yes. 

MR. MUNOZ: It depends. The first day of the 



week allows for travel, and we begin our hearings at about 
1:30. We usually get in there about an hour before that time, 
and we review cases for that day. 

Now, in the evening when we go home, sometimes, 
and sometimes not, some of the members will take packets home or 
to the hotel room with them to prepare for the next day's 
cases. 

To answer your question, I would say probably a 
fair estimate would be half an hour to 45 minutes to prepare for 
a case in total for each case. 

CHAIRMAN BURTON: How many cases. do you usually 
hear per hearing? 

MR. MUNOZ: Well, for the week, there's usually 
22 or 23 cases for the week. 

CHAIRMAN BURTON: So, you spend 11 hours a week 
preparing? 

MR. MUNOZ: In total, maybe not quite about 20 — 
about 22, when you consider taking them home or to your hotel 
room to review the cases. 

CHAIRMAN BURTON: You don't sleep at night or 
what? 

MR. MUNOZ: Yes, I do sleep at night, sir. 

CHAIRMAN BURTON: I mean, the time isn't there. 
In other words, these things just come up? How far in advance 
do your lawyers, or the agency, or somebody know that these 
hearings are going to take place? 

MR. MUNOZ: What happens, sir, I don't prepare 
all 22 cases. I take a portion of the cases that I'd chair. 



CHAIRMAN BURTON: How many do you do? 

MR. MUNOZ: I would chair about half of those 
cases . 

CHAIRMAN BURTON: If you don't chair them, are 
you sitting there? Is it just one on one? 

MR. MUNOZ: No, sir. If I don't chair the 
hearing, I would conduct the segment that covers parole plans. 
And that is, what is the inmate going to do when he's on 
parole . 

CHAIRMAN BURTON: So, somebody's up for parole. 

MR. MUNOZ: Yes, sir. 

CHAIRMAN BURTON: How many of you are sitting up 
here like us, board members? 

MR. MUNOZ: It's a three-member panel, two of 
whom are commissioners, and one is a deputy commissioner. 

CHAIRMAN BURTON: So, two of them are sitting. 
So, I assume each of them should be familiar with the case 
background and everything? 

MR. MUNOZ: Yes, sir. Now, you have to 
understand that the hearing is held to delve into each case, 
into each inmate. 

CHAIRMAN BURTON: Right. 

MR. MUNOZ: Each person on that panel has a 
segment of that hearing. 

CHAIRMAN BURTON: Right. 

MR. MUNOZ: The chairperson usually handles the 
commitment offense, and the criminal history, and the social 
background, things of that nature. 



The second person, and it's usually the deputy 
commissioner, handles what has happened with the inmate since 
his incarceration, post-conviction factors, from day one if it's 
an initial hearing. 

CHAIRMAN BURTON: But you all vote; right? 

MR. MUNOZ: Yes, sir. 

CHAIRMAN BURTON: So, shouldn't you all know 
everything there is to know about the prisoner, to the extent 
you can? 

MR. MUNOZ: Yes, and that's what the hearing's 
designed for in case, in preparation, something was overlooked, 
it would come out — 

CHAIRMAN BURTON: How long do the hearings last? 

MR. MUNOZ: Well, it depends. The initial 
hearings can last anywhere from an hour to two, two-and-a-half 
hours . 

A subsequent hearing can last 45 minutes to an 
hour-and-a-half . But the general rule is that they last as long 
as the inmate wants it to last. 

CHAIRMAN BURTON: We've been told that the 
hearings last sometimes several minutes, with the deliberations 
only taking four or five minutes. Is that accurate? 

MR. MUNOZ: With all respect to you, sir, no, 
it's not. That is not — 

CHAIRMAN BURTON: You don't have to respect me. 
I'm saying it's been said. I ain't saying it. 

MR. MUNOZ: That's a falsehood, sir. 

CHAIRMAN BURTON: It is? 



MR. MUNOZ: Yes, sir. 

CHAIRMAN BURTON: And then the decisions are 
prepared prior to the hearing? 

MR. MUNOZ: No, sir. 

CHAIRMAN BURTON: Never? 

MR. MUNOZ: The decisions are prepared during 
deliberations . 

CHAIRMAN BURTON: How can they prepare the 
decision until you decide how to vote? 

MR. MUNOZ: That happens during deliberations. 

CHAIRMAN BURTON: You decide how to vote during 
deliberations/ not at the end of the deliberations? 

MR. MUNOZ: We discuss the case during 
deliberations, and that helps us form the opinion we're going to 
have when we take a vote. 

CHAIRMAN BURTON: Who writes the decisions? 

MR. MUNOZ: The chairman is responsible for 
giving the decision. And the decision isn't written. 

What it is, sir, it's read into the record, which 
is tape .recorded. 

CHAIRMAN BURTON: Just like, you just read it? 
The guy just reads yes or no? 

MR. MUNOZ: No, there's a format. There's a 
format. We have two different formats, one for grants and one 
for denials. We use that as a guide when reading the decision. 

When the person responsible for reading the 
decision is preparing that decision, he uses that format and 
adds or deletes what he thinks is appropriate. 



Then, when he calls the inmate back in, along 
with his attorney, that decision is read into the record. 

CHAIRMAN BURTON: In the Rosenkrantz case, where 
there was a pending court order, did you read the court order 
prior to the hearing? 

MR. MUNOZ: No, I did not, sir. 

CHAIRMAN BURTON: Why not? 

MR. MUNOZ: Well, that was — there was an 
emergency situation in that particular case. I was, for that 
particular week, I was assigned to conduct hearings at Donovan 
State Prison in San Diego. 

The weekend prior to reporting to Donovan, I was 
in Ensenada, Mexico. I received word through my son that one of 
the commissioners assigned to hear the Rosenkrantz case in San 
Luis Obispo had lost his mother over the weekend. As a result, 
he had to cancel out of his appearance with Mr. Rosenkrantz. 

I was contacted. I was pulled out of Donovan, 
and I came straight home, and I reported to San Luis Obispo to 
take part in the Rosenkrantz hearing. 

CHAIRMAN BURTON: They never faxed you the court 
order? 

MR. MUNOZ: No, sir. 

CHAIRMAN BURTON: Who would have the 
responsibility of making that information available to you? 

MR. MUNOZ: Well, to be — well, I would say if I 
had been thinking, I should have requested it. 

CHAIRMAN BURTON: But who is it, the lawyers? 

MR. MUNOZ: No, what happens is usually — well, 



8 

almost every time, the chairperson in this particular case 
prepared himself, knowing that he was going to handle the 
Rosenkrantz hearing. And that's what the chairperson did. 

CHAIRMAN BURTON: He read the court decision? 

MR. MUNOZ: Yes, sir. 

CHAIRMAN BURTON: Did the people call you, tell 
you there was court decision there that you ought to be aware of 
before you held the hearing? 

MR. MUNOZ: No. I became aware of it once I got 
to San Luis Obispo. 

CHAIRMAN BURTON: I'm sorry? 

MR. MUNOZ: I became aware of it more fully once 
I reported to San Luis Obispo. 

CHAIRMAN BURTON: Would it have made sense to, 
like, read the court order before? 

MR. MUNOZ: Yes. 

CHAIRMAN BURTON: Had the lawyers advised you 
that it made sense to do that, or they told you not to worry 
about it, or what? 

MR. MUNOZ: No, they didn't tell me anything 
about that. 

One of the reasons — I did have a conversation 
with the attorneys, but I just wanted to make sure that, not 
being totally aware of the court order, that we were, in fact, 
going to be in compliance with that court order. I didn't want 
to do anything that would not be in compliance with that court 
order. 

CHAIRMAN BURTON: What did the lawyers tell you? 






They just kind of left you there with Pat Gray? 

MR. MUNOZ: Well, they didn't take part in the 
deliberations. They didn't tell me what to do, or how to do 
it. 

They just assured me that by holding the hearing, 
we were in compliance. We, the Board of Prison Terms, was in 
compliance with that court order. 

CHAIRMAN BURTON: What did the court order say? 

MR. MUNOZ: The court order said to — the main 
thing it said was to give a parole date to Inmate Rosenkrantz. 

CHAIRMAN BURTON: So, it didn't say, hold a 
hearing? It said, give him a date? 

MR. MUNOZ: It said hold a hearing and give a 
date to Inmate Rosenkrantz. 

CHAIRMAN BURTON: Right. Holding a hearing was 
not in compliance. That was partial compliance. Holding a 
hearing and giving a date would have been compliance. 

MR. MUNOZ: I guess, yeah, it can be interpreted 
that way, yes. 

CHAIRMAN BURTON: Yes. 

Are any of the lawyers here? 

MR. MUNOZ: I believe so. 

CHAIRMAN BURTON: We may want to be talking to 
them. 

What considerations does the Board take into 
account in determining suitability for parole? 

MR. MUNOZ: There are many factors involved. 
Some of those factors include the gravity of the commitment 



10 

offense itself. 

Many times, rather than being a solitary murder, 
it may be a multi-murder. 

CHAIRMAN BURTON: Let's assume it's a solitary 
murder . 

MR. MUNOZ: We take into account the gravity of 
the offense, the way it was carried out, the inmate's criminal 
history or lack of it. Also his social background. We consider 
his vocational background, whether he has a vocation to fall 
back on if he is given a parole date. We consider what his 
parole plans are. 

We consider the way he's behaved while 
incarcerated, whether was able to adjust, he or she, was able to 
adjust to the rules of the institution. And we consider that 
because, of course, that would be a reflection on whether that 
person can adjust to the rules and regulations of society in 
general . 

CHAIRMAN BURTON: So, the court found in 
Rosenkrantz that it would be "difficult to imagine any inmate 
could present a better picture than the defendant has in terms 
of background, institutional adjustment, and parole plans." 

MR. MUNOZ: My own personal opinion? 

CHAIRMAN BURTON: Yes. 

MR. MUNOZ: My own personal opinion, the opinion 
I formulated after delving into Mr. Rosenkrantz' case and 
looking at all the factors was that you're probably right. 

CHAIRMAN BURTON: I'm reading the Court. I ain't 
right or wrong. 






11 

MR. MUNOZ: There probably isn't an inmate that 
could have or has programmed better than Mr. Rosenkrantz. But 
one of the other factors I considered was the gravity of the 
offense itself. 

CHAIRMAN BURTON: That he killed somebody. 

MR. MUNOZ: Yes, sir. 

CHAIRMAN BURTON: He wouldn't have been there if 
he didn't. 

MR. MUNOZ: Pardon me, sir? 

CHAIRMAN BURTON: He would not have been there if 
he didn't. We're dealing with people who kill people in most of 
this stuff. 

MR. MUNOZ: Not necessarily, sir. If the victim 
had survived, then he probably would have been charged with 
attempted murder, and attempt murder defendants are also lifer 
prisoners. 

You don't have to be murderer to be a life-term 



prisoner 



that. 



CHAIRMAN BURTON: All right. I'll give you 



Well, basically, single murderers or single 
attempted murderers, they say that like about 98 percent of 
them, if they're let out, are not recidivists. 

So, there have been, out of 2,142 lifers in 
'98-99, and 16 in the calendar year '99, 14, I guess, have been 
found suitable for parole. 

Is there like an informal policy of setting 
parole dates, or how does that work? 



12 

MR. MUNOZ: I think the figures that you alluded 
to are correct. There isn't much recidivism as far as murderers 
go. 

However, again, one of the factors I considered, 
what I personally considered, was the gravity of the offense 
that Mr. Rosenkrantz committed. 

CHAIRMAN BURTON: What's graver than murder? 

MR. MUNOZ: The manner in which he committed 
that, sir. And that's how I connected to a danger to society, 
to the public at large. He used an Uzi and shot the victim ten 
times. 

CHAIRMAN BURTON: Well, it's pretty tough using 
an Uzi to shoot him less than ten. 

MR. MUNOZ: That's true. 

CHAIRMAN BURTON: That's why we tried to outlaw 
them. 

MR. MUNOZ: That's a true statement, sir, and I 
commend you for your efforts in trying to outlaw them. 

CHAIRMAN BURTON: I'm not in favor of that, but I 
mean, if he didn't have an Uzi, and he had a .45, I guess he 
might have shot him once or twice, but dead is dead. 

The Board of Prison Terms list of criteria for 
unsuitability includes: commitment offense, previous record of 
violence, unstable social history, sadistic sexual offenses, 
psychological factors, institutional behavior. 

How do you make decisions without acting in an 
arbitrary manner? I guess if you take the commitment offense, 
you're dealing with a murder. 



13 

So, you're taking everything else, at least with 
this person, you agreed with the assessment of the court about 
the adjustment, progress, and parole plan, and everything else. 

I mean, the Board can just kind of, really, when 
it's all over, do whatever they want, right, except if a court 
steps in? 

MR. MUNOZ: I'm sorry, sir. I didn't quite 
understand the last part. 

CHAIRMAN BURTON: I guess when it's all over, 
unless a court tells you otherwise, which they did here, and for 
some reason the lawyers felt it wasn't important enough to tell 
you that you may be violating a court order, the Board can do 
whatever they want as far as holding people back? 

MR. MUNOZ: No, we can't do whatever we want. 
What we have to do is consider all the factors that are involved 
in each particular case. 

Now, it may be that any particular inmate has not 
served the requisite amount of time, and yet he's behaved 
wonderfully while incarcerated. He's programmed very well. 
He's gotten an education. He has family support in place. He 
has a job waiting for him. 

But if the crime is so great, the gravity of the 
crime is so great, and he hasn't reached the amount of time that 
the judge had sentenced him to, then there's probably not going 
to be a parole date given. He probably won't be found suitable 
for parole. 

And I'm speaking from my perspective. 

CHAIRMAN BURTON: Of course; of course. 



14 

MR. MUNOZ: I can't speak for the other 
commissioners on the Board. 

CHAIRMAN BURTON: I understand that. 

So, twenty to life means life without possibility 
of parole? What does it mean when somebody's sentenced to a 
period up to life? Does that mean El Wop, or doesn't that 
assume that probably people — 

MR. MUNOZ: Sometimes we have to try to get into 
the mind of the judge that gave that sentence. Now, did he mean 
he has to serve at least twenty years? Or, did he mean he can 
go out the door at twenty years? 

CHAIRMAN BURTON: Don't you think judges know 
what the law is, and if they say it's twenty to life, and that 
there's possibility of credits or whatever, can't we assume they 
know that? Why do you have to get in their mind for? 

MR. MUNOZ: One of things we do, sir, in this 
process is, in compliance with 3042 of the Penal Code, is that 
we send out notices to all the entities involved in the 
situation, including the trial judge. And unfortunately, very 
few times do we get responses as far as getting the position of 
the trial judge. 

CHAIRMAN BURTON: Then isn't it safe to assume 
that he thought that the sentence spoke for itself? 

MR. MUNOZ: Well, if he's sentenced to twenty 
years to life -- 

CHAIRMAN BURTON: Knowing that there are, 
depending, I guess, on good-time credits, or whatever, but they 
understand what the law is when they sentence. 



15 

MR. MUNOZ: But if the inmate has not conformed 
to the rules and regulations of the institution, sir — 

CHAIRMAN BURTON: That's one thing. We're 
talking about the ones that do. 

MR. MUNOZ: Okay. 

CHAIRMAN BURTON: We're talking about, let's take 
Rosenkrantz. If he didn't have an Uzi, he probably would have 
shots somebody twice instead of ten times, because that's what 
Uzis do. That's why we don't like them. Wouldn't make it if he 
shot him with a .45 right. 

But, you know, the fact is that it was the weapon 
that he had as opposed to what he did, I guess? 

MR. MUNOZ: Well, it's not just the weapon, sir. 
As I was saying earlier, it's the manner in which he committed 
the crime . 

He not only shot the victim with an Uzi ten 
times, but his final shot was, he shot the victim in the head 
after the victim had already fallen to the pavement. 

CHAIRMAN BURTON: He shot him in the head once. 
If you fire an Uzi, Uzis are automatic weapons. 

SENATOR KNIGHT: Are they fully automatic? 

CHAIRMAN BURTON: Yeah, I think so. 

MR. MUNOZ: Yes. 

SENATOR KNIGHT: I think they're illegal in the 
state, illegal in this country. 

CHAIRMAN BURTON: Well, this guy was in before 
the Roos-Roberti law. 

MR. MUNOZ: This was in 1985, sir. 



16 

CHAIRMAN BURTON: It was before the law making 
them illegal. 

Anyway, do you think, getting back, assuming 
there are some people, that the recidivists, most of them are 
really, like, the technical violations. You know, peeing dirty 
in a bottle, missing an appointment with the parole officer, 
probation officer, et cetera. 

Do you think it would make sense to the taxpayers 
and to justice if a lot of these violators were directed to drug 
treatment programs and alternate punishment, as opposed to being 
put back in state prison at a 30 grand a year cost? 

In other words, if they did something real bad, 
they ought to just try them and stick them away for another long 
period of time. 

MR. MUNOZ: You're talking when an inmate's on 
parole? 

CHAIRMAN BURTON: Yes. 

MR. MUNOZ: I tend to agree with what you just 
said. I think it would save the taxpayers a lot of money. 

I don't think a parolee should be sent back to 
prison for a ticky-tacky offense or violation. Maybe he missed 
a meeting with the parole officer. I don't think that should be 
cause to send him back to prison. I think that should be cause 
to sit him down and read him the riot act, but not necessarily 
send him back to prison at taxpayers' expense. 

CHAIRMAN BURTON: That's like 58 percent of the 
revocations are semi ticky-tacky. 

MR. MUNOZ: Senator Burton, I might add that as a 



17 

commissioner on the Board of Prison Terms, we don't get involved 
with those types of situations. 

CHAIRMAN BURTON: Who's revoking them? 

MR. MUNOZ: The deputy commissioners do that. 

CHAIRMAN BURTON: They work for you? You guys 
set the policy. 

MR. MUNOZ: Well, yeah. 

CHAIRMAN BURTON: Could you not say that we 
aren't interested in ticky-tacky revocations? 

MR. MUNOZ: I get your point, sir. Yes, sir. 

CHAIRMAN BURTON: I just have a few more. 

Can you provide the Committee with an update on 
what's happening with the Armstrong ADA decision, Disabilities 
Act? 

MR. MUNOZ: Yes, I can. I know that the Board of 
Prison Terms is very, very concerned with that situation. We 
have training on that almost every chance — every time our 
office gets a chance to. We had some training last December, in 
a week-long training session that was held here in Sacramento 
for commissioners and deputy commissioners. 

We all fully understand that anyone that suffers 
from a disability covered in the ADA should be accommodated. 

I know a lot of the situations that occurred in 
the early '90s should never have happened. I've always, 
personally speaking, I've always treated everyone with respect 
and dignity. And anyone that's confined to a wheelchair and 
needs help up a set of stairs, I've always given it. 

I don't think because a person is handicapped or 



18 

disabled, that he should be treated as a second-class person. 
And I've always felt that way. 

CHAIRMAN BURTON: Once an inmate has served, say, 
the minimum time, so rehabilitation itself is not a sufficient 
condition for release? Rehabilitation would assume, you know, 
that they had, I guess, a good parole plan. They had a family 
or a job to go to. They were model prisoners, or whatever it is 
in prison. 

And that, in and of itself, is not sufficient, 
because you continue to look back to the underlying crime? 

MR. MUNOZ: That is one of the factors we 
consider. 

CHAIRMAN BURTON: That's the overwhelming factor. 

MR. MUNOZ: Yes, sir. I think it'd be safe to 
say that. 

CHAIRMAN BURTON: How about Rosenkrantz shot 
somebody with a .45 once, killed him right in the heart, instead 
of an Uzi with ten shots? 

MR. MUNOZ: As you indicated earlier, that still 
is a very serious crime. Murder is the most serious crime. 

CHAIRMAN BURTON: But you keep bringing up the 
fact that he shot him ten times. 

If he shot him once in the heart, given the fact 
also that murderers, this type, have the lowest rate of 
recidivism of any criminals in the system. 

MR. MUNOZ: What you've stated is certainly 
something to consider, but I would still go back to the manner 
in which Mr. Rosenkrantz committed the crime. 



19 



CHAIRMAN BURTON: I'm asking you, if he shot him 
once in the heart. So, it wasn't ten times with an Uzi. The 
tenth shot didn't hit him in the head after he fell down dead, 
although we probably don't know that for certain. 

But one shot in the heart. Boom, dead. 

MR. MUNOZ: And you're asking me whether — 

CHAIRMAN BURTON: Would that make a difference 
versus the ten? 

I'm wondering what it would take for somebody to 
get out on parole who, unfortunately, took a life, but yet they 
weren't eligible for life without possibility. So, it was 
assumed in the laws and the sentencing that, at some point, 
these people were rehabilitated and not a danger to anybody, 
except maybe politically if you were on the Board of Prison 
Terms and wanted to run for mayor of Ontario; it might come back 
to bite you, but besides that. 

MR. MUNOZ: Well, I don't want you to think I'm 
beating around the bush. 

CHAIRMAN BURTON: No, that's all right. It's not 
an easy question. It's sort of hypothetical, to say the least. 

MR. MUNOZ: But again, there are many factors to 
consider, and one of them is, one of the things I run through my 
mind each and every time I hold a hearing or take part in a 
hearing is, will this individual seated in front of me, will he 
be a danger to the general public? Will he be a threat to the 
public safety? 

CHAIRMAN BURTON: And you just agreed with me 
that only two percent of them are recidivists. 



20 

MR. MUNOZ: That's true. But if you're referring 
to the Rosenkrantz case, and I have no prejudices in the 
Rosenkrantz case. I only know what is factually in front of me, 
is that this gentleman went to a shooting range, practiced 
shooting, purchased an Uzi, and used that Uzi to kill a human 
being, shot him ten times. The final shot, after he had fallen, 
was to the head. And to me — 

CHAIRMAN BURTON: We really don't know if that 
was the tenth of ten shots, or there were nine bursts and one. 
I understand that. 

But if the judge or jury would have found it 
premeditated murder, he wouldn't have been on a potential life 
up to life. He would have been life without possibility of 
parole or probably on death row, awaiting Godot, or somebody. 

Senator Lewis. 

SENATOR LEWIS: In 1999, there were 16 lifers 
that were recommended for parole. The Governor overturned every 
one of those cases, as I understand it. 

That being the case, what is your thought process 
right now? Do you believe the Governor has an unofficial policy 
to withhold on all those types of cases? 

MR. MUNOZ: I know that the Governor has a 
separate authority, an authority separate from ours. And he has 
the authority to review those cases that we recommend parole 
suitability for. 

Whatever decision he makes, he makes. He 
considers the well-being of the public, I imagine. I don't 
know. 



21 

I don't know if he has a policy. I know what I 
read in the papers. I know of the comments that are attributed 
to him. 

He's never talked to me about any personal policy 
that he might have. 

I don't know if that answers your question. 
Senator Lewis. 

SENATOR LEWIS: Does that have any impact at all 
on your thought process if you thought the Governor did have a 
policy like that. Would you change any of your recommendations 
or actions, or do you think it might have any impact on the 
Board in any manner? 

MR. MUNOZ: No. I take my responsibilities very 
seriously, and I take it as an individual. And I consider all 
the factors. I form an opinion, and I vote my conscience. 

I've always done that, not only here on this 
board, but on other boards that I've served on before. 

And if the Governor reverses or changes what I 
recommend, that's the Governor's business, sir, is all I can 
say. I've done my part. 

SENATOR LEWIS: Thanks. 

CHAIRMAN BURTON: Senator Hughes. Senator 
Knight. 

SENATOR KNIGHT: Just a couple questions. 

You mentioned the rate of recidivism for those 
kinds of inmates who are twenty to life is two percent; is that 
correct? 

MR. MUNOZ: I believe so. I read that figure 



22 

elsewhere, and I think that's pretty close. 

SENATOR KNIGHT: Is that pretty close? 

MR. MUNOZ: Yes, sir. 

SENATOR KNIGHT: So, there are those who would 
commit those same crimes again if you turned them loose? 

CHAIRMAN BURTON: A crime, not the same crime. 

SENATOR KNIGHT: I guess that's right. They 
couldn't commit same one over. 

CHAIRMAN BURTON: No, but I mean, they might well 
go steal a car. It doesn't necessarily mean two percent murder 
again. 

SENATOR KNIGHT: Oh, I thought that you were 
talking about the recidivism rate of committing a similar crime. 

CHAIRMAN BURTON: Recidivism means you come back, 
you recede. 

SENATOR KNIGHT: I understand the term, but for a 
similar crime. That's what I'm asking. 

If a murderer is turned loose on parole, and he 
commits another murder, he goes back; right? 

CHAIRMAN BURTON: Yes. If a murderer is turned 
loose on parole and they steal a car, they'll go back. 

SENATOR KNIGHT: I understand, but I'm asking 
what's the recidivism rate of those paroled that commit a 
similar crime and go back? 

CHAIRMAN BURTON: How many of them murder again? 

SENATOR KNIGHT: Yes, that's what I'm trying to 
get to. 

CHAIRMAN BURTON: Plain English does it all the 



23 

time. 

MR. MUNOZ: I don't know exactly, sir, but it's 
very low. 

SENATOR KNIGHT: Then when you have a number of 
cases that the Board is going to review, how many cases total 
per meeting, per session that you have? 

MR. MUNOZ: Usually about 22 or 23 cases in a 
week's time, from Monday till Friday night. 

SENATOR KNIGHT: And out of those, say, 22, how 
many of them can you look at and say, those are automatic 
denied? Just kind of — 

MR. MUNOZ: It depends — realistically, sir, it 
depends what institution you're in. If you're in an institution 
like Pelican Bay or Corcoran, where many of the inmates are in 
administrative segregation or housing in the SHU, segregated 
housing, and they have a high classification score, it's not 
unusual for inmates at either one of those institutions to have 
a classification score of 200, 250, close to 300. And that's 
extremely high. 

SENATOR KNIGHT: I don't know what that means. 

But what I'm asking is, usually you can look at a 
folder that is representing some individual, whether it's a 
performance folder or a folder that would qualify him for a 
parole, and you can look at those. After looking at so many 
over the years, or over a year, and you can say, obviously, he's 
not eligible. 

You can take five minutes or two minutes and say, 
obviously, he's not eligible. 



24 

MR. MUNOZ: It would be easy to do that; however, 
we have to allow for the inmate to present his case. We have 
to allow for him to explain things that may seem inexplicable to 
us. We have to give him his time, his turn at bat. He might be 
able to justify some of the things that look, on the surface, to 
be dead man issues. And that's what we do. We give him that 
opportunity. 

SENATOR KNIGHT: So, he has unlimited time to 
present his case? 

MR. MUNOZ: Yes, sir. 

SENATOR KNIGHT: Okay. 

CHAIRMAN BURTON: So, there are no time 
constraints on the prisoner? 

MR. MUNOZ: No, there's nothing outlined where a 
prisoner has time constraints. 

Sometimes this happens on occasion, if an inmate 
gets repetitive or goes over the same issue over and over again, 
we may tell him that that point has been made, and move on to 
newer ground. 

CHAIRMAN BURTON: I'd like to go to the women 
down in Frontera. Some are lifers. I think a few are lifers 
without, and some are up to life. Most of whom, if not all of 
whom, were convicted before the battered woman syndrome evidence 
was admissible as either a mitigating case, or whatever. 

Have you had any hearings on them? 

MR. MUNOZ: I've been — Senator, I've been to 
Frontera one time. I heard, I believe, three cases. Then I 
moved to another institution. 



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CHAIRMAN BURTON: Do you remember the three 
cases? 

MR. MUNOZ: I don't remember them specifically. 
I don't recall the names, but I do know that I did not vote for 
a parole suitability for any of the three. I recall that. 

CHAIRMAN BURTON: Based on what? Do you 
remember? 

MR. MUNOZ: Based on, again, the gravity of the 
crime . 

CHAIRMAN BURTON: Did you take into consideration 
the fact that, assuming they were the same women that I 
interviewed down there, the fact that their husbands were 
beating them with baseball bats, and one of them even with a 
sledge hammer and other stuff before they ended up killing him? 

MR. MUNOZ: The three cases that I handled, I 
don't recall that being the scenario. These were robberies 
that these women were involved in, the three inmates were 
involved in. There weren't any domestic violence cases. 

CHAIRMAN BURTON: All right, so they were 
basically felony murder? 

MR. MUNOZ: Yes. 

CHAIRMAN BURTON: They were murders or just 



robbery? 



yes 



itself? 



MR. MUNOZ: Murders committed during a robbery, 



CHAIRMAN BURTON: Felony murders or just robbery 



MR. MUNOZ: No, they were felony murders. I 



26 

mean, all murders are felonies. It was a murder that was 
committed during a robbery; yes, sir. 

CHAIRMAN BURTON: Felony murder robbery. 

And you did not hear any of the battered woman 
syndrome things then? 

MR. MUNOZ : Not in those cases, no, sir. Those 
issues were never brought up. 

CHAIRMAN BURTON: Do you think that would be an 
important issue if someone came before you with that, assuming? 

MR. MUNOZ: Yes, I do. 

CHAIRMAN BURTON: I want to ask just briefly, and 
then witnesses in support and opposition, but maybe if the 
lawyer for the Board might come forth. 

Could you just identify yourself for the record? 

MS. DUNLAP: Tina Dunlap, D-U-N-L-A-P. 

CHAIRMAN BURTON: And you are? 

MS. DUNLAP: Staff counsel for the Board of 



Prison Terms. 



there? 



CHAIRMAN BURTON: For how long have you been 



MS. DUNLAP: July, 1994. 

CHAIRMAN BURTON: And before that? 

MS-. DUNLAP: Before that I worked for the 
Department of Corrections. 

CHAIRMAN BURTON: You're familiar with, I guess, 
the original court order on the Rosenkrantz case? 

MS. DUNLAP: It has been a while since I've read 
it, but I'm somewhat familiar. 



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CHAIRMAN BURTON: What I'm trying to find out is, 
who didn't advise the members of the Board when they're hearing 
the guy's case, that there's a court order, and the judge says 
you've got to do this, and maybe you ought to read this thing 
before you decide what you're doing? 

Or nobody thought it was important. 

MS. DUNLAP: The Chairman of the hearing panel 
was given a copy of the court order, and I believe he read it 
prior to the hearing. 

CHAIRMAN BURTON: He's the guy who wasn't there 
because of a death or sickness in the family? 

MS. DUNLAP: No, that commissioner was present. 

CHAIRMAN BURTON: I thought that was the one 
where you were down — 

MR. MUNOZ: No, I replaced the second 
commissioner on that panel. 

CHAIRMAN BURTON: And nobody told him? 

MS. DUNLAP: Apparently, not from what I recall. 

CHAIRMAN BURTON: Who was the Chairman? 

MS. DUNLAP: The Chairman of the panel was 
Chairman Hepburn. 

And I believe — I don't really want to go into 
attorney-client privilege discussions on the case, but I believe 
we were all in the same room when we discussed the court order, 
from my memory. 

CHAIRMAN BURTON: I don't want to go into 
attorney-client stuff. 

So, we all were — 



28 

MS. DUNLAP: The hearing panel, the Executive 
Officer at the time, and myself. 

CHAIRMAN BURTON: And it was decided who cared, I 
guess? Is that attorney-client privilege, who cared? 

MS. DUNLAP: I don't believe that was the 
decision. 

CHAIRMAN BURTON: Well, they sure didn't pay any 
attention to it, and now they're banged by a District Court of 
Appeal. So, somebody obviously didn't think much of it. 

Now, your job is what? You prepare them for the 
hearings? What do the lawyers do? 

MS. DUNLAP: No, we don't prepare commissioners 
for hearings. We basically give opinions on interpretations of 
laws, statutes, regulations. 

CHAIRMAN BURTON: While they're sitting kind of 
like this? 

MS. DUNLAP: We're in-house counsel. We're 
scheduled at .Headquarters 99 percent of the time. We may get 
calls from commissioners from time to time during hearings, in 
which they ask our legal opinion about some issue. 

CHAIRMAN BURTON: On this one, a lawyer happened 
to be at the hearing? 

MS. DUNLAP: Correct. 

CHAIRMAN BURTON: Because of the court decision? 

MS. DUNLAP: Correct. 

CHAIRMAN BURTON: Somebody thought it was 
important enough to be there, and somebody asked a question, and 
it really didn't matter. 



29 

MS. DUNLAP: I'm sorry, I didn't hear that last 
part. 

CHAIRMAN BURTON: I would imagine you were there, 
where you usually aren't, because of the court decision. But 
when it was all over, it's like, I guess, it was, like, don't 
worry about the court decision, because nobody did. 

And he was not given a copy, but it was talked 
about. I don't want to get into the conversation. It was 
talked about. 

So, all you do is, and I don't mean it in a 
pejorative way, but what you do is, you're back there, and 
they'll call. 

Who is giving them advice on the Americans with 
Disabilities Act, anybody? 

MS. DUNLAP: Basically whatever attorney they 
called at the time, along with the Attorney General's Office, 
who represents the Board in the case. We're strictly in-house 
counsel. 

CHAIRMAN BURTON: Disabled people were crawling 
up the stairs, and blind people were given stuff to read. 

Did anybody say, maybe this doesn't do the job? 
Or if it wasn't your deal, then it wasn't your deal. 

You're not the Chief Counsel then? 

MS. DUNLAP: Correct. 

CHAIRMAN BURTON: You're not Chief Counsel? 

MS. DUNLAP: No, I'm not. 

CHAIRMAN BURTON: Who is Chief Counsel? 

MS. DUNLAP: His name Dan Cossack. 



30 

CHAIRMAN BURTON: Maybe we ought to find out from 
him what kind of advice he gives, because that was good advice, 
too, get a lot of court decisions. 

Unless there's other questions of the Committee, 
thank you, ma'am. 

Witnesses in support. 

MR. MUNOZ: Can I scan the room, sir? I want to 
see whether they showed up or not. 

CHAIRMAN BURTON: Senators Vasconcellos and 
Polanco. 

SENATOR VASCONCELLOS: I'll go first. 

Mr. Chair and Members, I don't think I've ever 
before come to oppose a nomination. I'm not naive about what 
we're dealing with here, but there's some very serious matters 
here that need to be addressed by you and questions. 

The letter that Senator Polanco and I have 
written to you was written earlier this afternoon, after the 
court case came down last Friday, which is, in its character, 
fully damning. 

I first came across these kind of cases when a 
friend of mine, who's a therapist in Silicon Valley, called and 
said, "I've got a client who's in prison. Would you learn about 
his case." 

This guy was a brilliant computer scientist. 
Tragically an alcoholic. He tragically killed his common-law 
wife in a fit of rage. No excuse. 

He had no prior record ever. In prison he's been 
an ideal prisoner for 16 years. 



31 

I read the transcript of the Board of Prison 
Terms hearing that said the crime was so bad, and considering 
his prior record and his prison record, we deny it. 

Two things where they had nothing at all. It was 
a form, and the format had nothing to do with who he was. 

And the case here reads similarly. I listened to 
Mr. Munoz. I don't know much about him other than what I heard 
here today. And if you didn't know about this, or you hadn't 
read the opinion, maybe the lack of integrity charge in our 
letter is a bit harsh, but we didn't know he didn't know. 

But he's talking about what sounds like first 
degree murder, but the court said it was second; the jury found 
second. And the basis for holding a person in is the character 
of the crime, and it's also about whether he or she poses a 
threat to the general public. 

This guy, while murder is never acceptable, shot 
someone who called him a faggot in front of his parents, and 
laughed at him when he was asked to retract. He wasn't going 
around shooting people. He had one particular emotional, 
painful experience where he reacted, overreacted. 

But nothing in his record shows that he's a 
threat to the general public. His record in prison has been 
exemplary. He's got a degree. The DA in L.A. said he wasn't 
opposed to parole. Some sheriff said he should get parole. I 
mean, the whole record's replete with finding the suitability, 
and yet the finding was to the contrary. 

Then the District Court, in its hearing on 
Saturday, I gather you aren't going to vote today, but we have 



32 

copies of the opinion. I would urge each one of you to read it, 
and read how the court has found about the failure to comply 
with the law. 

Mr. Munoz has been part of that group who failed 
to comply with the law. I don't expect the Governor to appoint 
people who satisfy my concerns or my biases in the area, but I 
expect him to appoint people who comply with the law, and whose 
actions are informed about the law and meet the law. That's 
just basic sense of the job. 

Anyone of us takes an oath to uphold when we take 
a position for the state, that we uphold the law. 

And the record here of this Board, and this 
action, and Mr. Munoz involved, fails that task. 

This is the one that's public. How many more are 
there that aren't public, where someone didn't go to court? How 
do we know? 

But this is the one that's public. The decision 
came down last Friday only. It's pretty damning. I urge you to 
read it and ask the questions as they've been asked somewhat 
even more. 

And it seems to me that the record does not 
support confirmation of this man. 

SENATOR POLANCO: Mr. Chairman and Members, as 
you know, we've had a Joint Select Committee on this subject 
matter, Joint Select Committee on Prison Construction and 
Operation. We held a hearing, a full day, not dealing with a 
specific case per se, but dealing with this whole process, or 
lack thereof, of implementing a process as outlined by law. 



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So, when we hear testimony, and when I hear 
testimony from the commissioner before us, who is incorporating 
elements of first degree murder, that's left for the judge and 
the jury. And there's tendency throughout the hearing, when we 
held this hearing, there was a tendency to see time and time 
again elements that are not the basis from which these 
individuals have been sent to prison, but are the basis for 
which decisions are being implemented. And they are, quite 
frankly, wrong in doing so. 

And we have not seen any corrective action 
whatsoever as to correcting that, or through a training program, 
letting these commissioners understand that the jury, the judge, 
decide a case. And it's those elements of the case that are 
brought forth into the correctional system. 

In this particular case, the classification of 
this individual was a zero, which meant that he was an 
exemplary, albeit he committed a crime, and paid his price for 
the crime. And the price was a second degree term. 

For us then to, for whatever reason, have almost 
a knee-jerk constant reaction, or a policy, written or 
unwritten, that just deals with individuals such as the case 
here, of deniability with no basis whatsoever, or the creation 
of basis that is objectionable and would be thrown out — 
wouldn't stand in the court at the inception is just wrong. 

I'm troubled by what we see. I believe that 
individuals who commit these heinous crimes must pay a price, 
and there is price to pay. And that is determined by the judge 
and the jury. And the sentencing then is brought upon them. 



34 

And if the sentence was 15 to life, which was, I 
believe here, the case, and then you have the judge who did the 
case, the district attorney who prosecuted, also coming forward 
with letters saying, "Look, this individual is suitable," there 
is no basis or evidence to the contrary. 

We ought not to have a system that just allows 
for it to run on automatic pilot on these kinds of cases. 

So, I'm here to join Senator Vasconcellos in 
opposing this nomination on the basis that a court order was 
issued. It was not honored. Subsequent court orders were 
issued, and I don't think that's the kind of public policy work 
that we should be supporting. 

CHAIRMAN BURTON: Any questions? 

SENATOR KNIGHT: Question, Mr. Chairman. 

When a judge gives a twenty to life, does that 
mean that he can be paroled any time before twenty years? 

CHAIRMAN BURTON: I would imagine with good time 
credit. 

SENATOR KNIGHT: So he could, in essence, spend 
seven years, as one individual did for a heinous crime? 

CHAIRMAN BURTON: Yeah, I think he spent seven 
years . 

SENATOR KNIGHT: One other question. 

During parole hearings, are not the victims there 
to testify as well? 

SENATOR VASCONCELLOS: As I recall, they are 
invited to be there, Senator Knight. 

In this case, as I read the District Court of 



35 



Appeals decision, the victim's only surviving relative is a 
grandmother who supported the parole. 

CHAIRMAN BURTON: I want to ask a question. I 
don't know, Mr. Munoz, if you have the answer to this, or maybe 
the attorney can come back, or maybe Senator Presley could 
enlighten us. 

In 1996, Rosenkrantz was found suitable for 
parole by a three-member panel. The panel found he committed 
his crimes as a result of extreme stress, would not pose an 
unreasonable risk to society if released. Model inmate. Job, 
blah, blah, blah. 

Then, in fact, one of the really triggers to his 
pulling the trigger when he was disowned by his father, when his 
father found out he was gay. The father's long changed his 
views about his son. 

But the panel's finding was overturned after an 
internal board review. 

What is an internal board review? 

MR. MUNOZ: I think that's referring to the 
decision review unit, a review by the decision review unit. 

CHAIRMAN BURTON: Who are they? 

MR. MUNOZ: And that, in this particular case, 
that unit was comprised of commissioners Giaquinto, and I can't 
recall the other gentleman's name, Mancourt. 

CHAIRMAN BURTON: So, two people overturned three 
people? 

MR. MUNOZ: Yes, sir. 

CHAIRMAN BURTON: That's kind or a weird way of 



36 

doing it; isn't it? Is that how it works? If you have three 
people that hear something, and then two people that don't can 
overturn the three? 

Bob, is that how that works? 

SENATOR PRESLEY: We'll get you an answer here in 
a minute. 

MS. DUNLAP: I'm sorry, what was the question? 

CHAIRMAN BURTON: I asked, when the three-member 
panel found basically suitable for parole, then an internal 
board review found it wasn't, I just wondered what is the 
internal board review? 

MS. DUNLAP: That can be found in Title XV, 
Division 2. 

CHAIRMAN BURTON: Fine. Why don't you tell me 
what it is so I don't have to go look it up? 

MS. DUNLAP: A decision, a proposed tentative 
decision comes up to Board Headquarters. It's reviewed by the 
decision review unit, which is made up of the legal unit. A 
recommendation is made by the chief counsel to a committee. And 
the committee decides whether or not to go with the 
recommendation. 

CHAIRMAN BURTON: What the hell are the lawyers 
doing? I mean, all you're supposed to do is say what's legal 
and isn't legal, not pass judgment. 

Was it illegal for the Board, for those three 
people, to make a subjective finding that the person was 
suitable for parole? 

MS. DUNLAP: Part of the decision review 



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committee is to evaluate whether or not the information in the 
record supports a decision that a commissioner made. 

CHAIRMAN BURTON: And how do you do that? 

MS. DUNLAP: Review the record. 

CHAIRMAN BURTON: What record? 

MS. DUNLAP: All of the information that we have 
concerning the inmate. 

CHAIRMAN BURTON: In other words, some person can 
stand up and, willy-nilly, lie and there's nobody from the 
Department of Corrections or the warden, or somebody, saying 
that isn't true; the guy was in 15 fights in the last three 
days? 

I mean, I'm missing something. 

Are the hearings so slipshod? 

Three people decided something. Some attorneys, 
whose job isn't to do that, decide that they ought to stop it, 
and overrule it, and send it to somebody else. I don't know if 
that's the job of the attorneys. 

MS. DUNLAP: The attorneys make a recommendation. 
They do not make a final decision. 

CHAIRMAN BURTON: Why would you make a 
recommendation overruling them? What did they find? 

MS. DUNLAP: I don't recall specifically. 

CHAIRMAN BURTON: Well, I'd like to know. I 
would like to know exactly what it is they found. 

Then they found it, then they go to some other 
group, who is — 

MS. DUNLAP: The decision review committee. 



38 

CHAIRMAN BURTON: Which committee? 

MS. DUNLAP: That's made up of three 
commissioners designated by the chairman. 

CHAIRMAN BURTON: So, three people overrule three 
people? Not two people overrule three people? 

MS. DUNLAP: Correct. 

CHAIRMAN BURTON: Wouldn't that normally be a 
push in most life? 

MS. DUNLAP: I'm sorry, I don't understand the 
question. 

CHAIRMAN BURTON: That's a tie. 

I would like to know exactly what it is that they 
found that led them to second-guess the people, bleeding hearts 
not, who decided to set a date; okay? And would like to have 
that before this. 

Any other testimony to come before the Committee? 

MS. TAYLOR: Thank you, Mr. Chairman and Members 
of the Committee. 

My name is Wendy Taylor. I'm here on behalf of 
the California Attorneys for Criminal Justice. 

We oppose this nomination for two reasons. 

The first reason is kind of on a general 
principle. For the past 10, 15, maybe 20 years, the Governors 
of California have always nominated peace officers to the Board 
of Prison Terms. 

If you look at Penal Code Section 5076, it 
specifies that appointments to the Board of Prison Terms must 
represent a cross section of the population of the State of 



39 

California. And peace officers are not the only population in 
the State of California. So, on that basis, we do oppose this 
nomination. 

The second reason is what's been discussed at 
length here today, and that what occurred in the Rosenkrantz 
hearing. Mr. Munoz, whether he had a court order or not, 
whether he knew about it or not, he was charged with having that 
knowledge when he entered into that hearing to make the 
determination. And whether he knew it or not, he violated a 
court order. 

As you know the rule of law, it's extremely 
important, and he's indicated that, whether through ignorance or 
inadvertence, he's willing to ignore the rule of law, we think 
that that is a bad, bad policy. 

And for those reasons, we oppose this nomination. 

CHAIRMAN BURTON: I mean, with respect, if he 
didn't know, although I guess he knew something because the 
attorney testified that it was discussed. 

But if somebody doesn't know anything, you know, 
kind of known or should have known isn't the same as driving a 
truck into a crosswalk, where you know or should have known you 
might run over somebody. 

I don't know if the known or should have known 
applies except for the fact that the attorney said it was 
discussed. 

MS. TAYLOR: Right. My point is that when they 
enter into these hearings, they're supposed to be prepared and 
have all the relevant knowledge. And a court order certainly is 



40 

a relevant piece of information that he should have had. 

CHAIRMAN BURTON: That's what we're going to try 
to find out. 

Anything else? If not, the Committee will be in 
recess at the call of the Chair. 

We will reconvene. 

Without objection, that material will be made 
part of the record. 

And if you could summarize briefly, sir. 

MR. GOODMAN: I'm sorry, I am somewhat deaf. I 
cannot hear much of what is going on. 

I came here — 

CHAIRMAN BURTON: I said, the material will be 
made part of the record, and if you could summarize briefly the 
material which you gave us, and please proceed, sir. 

MR. GOODMAN: My name is Richard Goodman. I live 
in Oakland, California. 

And I have been able to do something which you 
folks have not been able to do because your duties are so spread 
out doing important things on many, many issues. 

I spent four to five months full time reading 
official documents generated by the Board of Prison Terms, 
meaning hearing transcripts, psych reports, appeals, rejections 
of appeals, and other documents. 

And I have included four documents there. They 
are Friend of the Court brief, which I wrote for some legal 
action. And there are two Office of Administrative Law 
determinations which I think are extremely relevant to what's 



41 

going on with Mr. Munoz in the Rosenkrantz case, being simply 
symptomatic. And there is a five-page signed statement, signed 
by Al Letty, a past member of the Board of Prison Terms, and an 
attorney, describing some of the illegalities he felt that the 
Board of Prison Terms was engaging in, and which they are still 
engaging in. 

Now, I have hundreds of documents. I have more 
proof and evidence than would fill a pickup truck about what 
these people are doing. I cannot move in a large office room, I 
have so much paperwork. 

And I summarized this in a letter to Mr. Presley 
last August, and took it to his office, and met with him for 40 
minutes. And he said he was going to tell the Governor about 
this. 

This is contained in the subcategories in the 
Friend of the Court brief, 1 through 15 or so. I think there 
were only 13 in the letter that I gave him. 

So, I have no proof or evidence that Mr. Presley 
ever discussed this with the Governor. I phoned his office 
several months later a couple of times and got no straight 
answer. 

Now, several weeks after I met with Mr. Presley, 
I got a phone call from the FBI, and they were interested in 
this matter and wanted to see further evidence. So, I brought 
them a box of further evidence. This, I'm sure, is going to 
grind through very slowly. I was told it will take several 
years, that it will go to whoever is appropriate, and if they 
take action, they take action. But they felt that my letter 



42 

was interesting enough to cause some investigation on some 
level . 

The other thing — well, there are several points 
I want to make. This is time for you folks to do some serious 
house cleaning about the Board of Prison Terms. Their abuses 
are legion, and I can prove it. 

But more specifically, what this is caused by is 
a lack of nomination of people who are qualified to determine 
the state of mind of a prisoner. We have a group of ex-lawmen 
and ex-sheriffs, most of whom have not one iota of psychological 
training, and who openly in transcripts of Board of Prison Terms 
hearings reject the findings of psychiatrists and 
psychologists. And I have many examples of this. 

Tom Giaquinto is probably the worst one. He says 
right out open, "Oh, I don't believe that psychiatric report. 
Forget it." 

I have these things in transcripts, official 
Board of Prison Term transcripts. 

Now, it is necessary to start seeing to it that 
people who are qualified to the Board of Prison Terms get 
appointed, and those who are not qualified do not get appointed 
to this Board. We need specialists who know something about 
what goes on in the mind of the prisoner. 

I want just briefly to touch to two particularly 
outrageous examples, then I want to tell you what I see as the 
consequences to the State of California and the taxpayers of 
this. In other words, in about three minutes I'm done. 

I have — now, Mr. Munoz gave you a highly 



43 

idealized version of what goes on at these hearings. He said, 
for instance, one of the things they consider is whether or not 
an inmate has a job or employment possibilities when he gets 
out. 

Now, this is nonsense. In the Friend of the 
Court brief, which you have a copy of, I have quoted one 
particular hearing in which a lawyer, representing an inmate 
named Jackson, summarized to the three-man board by saying, "You 
know, I saw that you had not given this man his parole last time 
on the basis of his not having a way to earn a living." 

And the attorney went on by saying, "Well, he was 
a paralegal then. He is still a paralegal. And I looked in the 
newspaper today. There were 41 ads, not counting agency ads, 
showing, you know, for paralegals, paying $25-35,000 a year." 

And I think it was Mr. Giaquinto asked, "Is that 
in his C file, Counselor?" 

And the attorney said, "It is. I put it there 
myself. " 

They chit-chatted a little bit. They adjourned 
to make their decision. They came back five minutes later and 
denied this inmate because he did not have a way to earn a 
living. 

Now, in the amicus brief that you have before you 
there is another outrageous example. An inmate who was denied 
and who was told by the head of the three-man board, "I think we 
need to talk to the CDC about moving you to another facility. 
It is clear that you have fallen into a pattern of good behavior 
that is not in your best interests," unquote. 



44 

So, this is what's going on. Don't be fooled by 
these idealized versions of way the Board behaves. You have 
the evidence in front of you. I can support any of it with 
documents . 

I do want to talk about the consequences to the 
State of California of the behavior of the Board of Prison 
Terms . 

You have now probably a Justice Department 
investigation somewhere on the horizon. You have at least 
seven -- I got a phone call today saying the seventh taxpayer 
lawsuit against the State of California has been filed against 
the Board of Prison Terms for wasting the taxpayers' money. And 
so far as I understand it, the judge in charge has denied every 
single motion of the AG's office, and it is proceeding apace. 
It will soon be a class action suit. 

The sanctions asked range from lawsuit to 
lawsuit, maybe some of them it's a hundred dollars a day for 
false imprisonment for every day of being imprisoned. Another, 
it's $100 million. Another, it's the repayment to the state of 
every single dollar that each one of these commissioners was 
paid as salary and as perks and bonuses during the time that he 
was illegally acting. 

I want you to look at Office of Administrative 
Law determinations Number 27, 1999, and Number 41, 1998. These 
describe certain actions, and they state, "If these actions are 
going on, they are illegal if they were not approved according 
to the Administrative Procedures Act." 

Well, first of all, these are not real 



45 

regulations. They are underground regulations which have been 
put into effect by the Board of Prison Terms like a Stealth 
Bomber movement without us knowing it, and they have been going 
on for decades. 

CHAIRMAN BURTON: Sir, could you please wind up. 
We have to get out of the hearing room. 

MR. GOODMAN: And the consequences of this are 
going to be hundreds of millions, if not billions of dollars' 
worth of lawsuits against the State of California. 

So, I ask you, do not confirm another lawmen, 
another ex-sheriff. If you believe in the Constitution, if you 
believe in the laws of the State of California that you folks 
have made, don't confirm people who are not qualified. 

Thank you very much. 

CHAIRMAN BURTON: Thank you, sir. 

Any other testimony to be heard? If not, the 
Committee's in recess. 

[Thereupon this portion of the 

Senate Rules Committee hearing was 

terminated at approximately 4:47 P.M.] 
— 00O00 — 



46 



CERTIFICATE OF SHORTHAND REPORTER 



I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 



s 



JiJt 



day of 




, 2000. 




:lyn JTMIZJ 
Shorthand ''Reporter 



396-R 

Additional copies of this publication may be purchased for $3.00 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1 020 N Street, Room B-53 

Sacramento, CA 95814 

(916)327-2155 

Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 396-R when ordering. 



^HEARING 

SENATE RULES COMMITTEE 

STATE OF CALIFORNIA 




DOCUMENTS DEPT. 

MAY 2 2 2000 

SAN FRANCISCO 
PUBLIC LIBRARY 



Le+i'st*'*** 4 ' 



STATE CAPITOL 

ROOM 112 

SACRAMENTO, CALIFORNIA 

MONDAY, MAY 8, 2000 
2:00 P.M. 



397-R 



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SENATE RULES COMMITTEE 



STATE OF CALIFORNIA 



HEARING 



STATE CAPITOL 



ROOM 112 



SACRAMENTO, CALIFORNIA 



MONDAY, MAY 8, 2 000 



2:00 P.M. 



Reported by: 



Evelyn J. Mizak 
Shorthand Reporter 



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11 

APPEARANCES 

MEMBERS PRESENT 

SENATOR JOHN BURTON, Chair 

SENATOR JOHN LEWIS, Vice Chair 

SENATOR JOE BACA 

SENATOR TERESA HUGHES 

SENATOR WILLIAM KNIGHT 

SENATOR JACK O'CONNELL 

STAFF PRESENT 

GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NETTIE SABELHAUS, Consultant on Governor's Appointments 

WADE TEASDALE, Consultant to SENATOR LEWIS 

FELICE TANENBAUM, Consultant to SENATOR HUGHES 

ANDY PUGNO, Consultant to SENATOR KNIGHT 

ALSO PRESENT 

JULIE KORENSTEIN, Member 
Board of Governors 
California Community Colleges 

RICHARD H. LEIB, Member 
Board of Governors 
California Community Colleges 

LESLIE WANG, Member 
Board of Governors 
California Community Colleges 

MARCY V. SAUNDERS, Member 

Occupational Safety and Health Appeals Board 

TOMAS ALVARADO, Secretary 
Veterans Affairs 



Ill 



SENATOR HILDA SOLIS 

JOHN FISKE, Vice Chairman 
State Veterans Board 

WILLIAM D. JACKSON, Commander 

American Legion, Post 855, Barstow Home 

DON HARPER, President 

California Association of Veterans Service Agencies 

LARRY LATTMAN, Chairman 

Allied Council, Yountville Veterans Home 

JUDGE BROWN 

Veterans of Foreign Wars 

JOSE PEREZ, President 

Sacramento Hispanic Chamber of Commerce 

LAWRENCE McCABE 
CAFE de California 

GAS PAR GARCIA, Commander 
American GI Forum, Sacramento 

RAFAEL SANCHEZ, Member 

Board of Directors 

United States Hispanic Chamber of Commerce 

JOSEPH MARTEL, M.D. 

California Latino Medical Association 

TED BURNETT, Labor Representative 

Barstow Veterans Home 

California State Employees Association 

VIRGINIA MARI GOODMAN 

California State Employees Association 

VALERIE WILSON, Employee 
Barstow Veterans Home 
CSEA 

GRISELDA BARAJAS, Member 

California Hispanic Chamber of Commerce 



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JOHN REECE, Commander 

District 13 

AmVets 

SYLVIA E. REYES, Chair 

Latina Network 

Sacramento Hispanic Chamber of Commerce 

LOUIS LOPEZ, Owner 

Printwise and Member, 

Sacramento Hispanic Chamber of Commerce 

MICHAEL OROSCO 

California League of United Latin American Citizens 

FRANK RAMIREZ, representing State Commander 
American GI Forum 

MAURICIO LEIVA 

San Joaquin Valley Latino Vote 

SAMUEL S. ORTEGA, Retired 
State Employee 

JOHN CANFIELD 
Veterans ' Advocate 

JOHN DEBBS, Vice Chairman 

Cal-Vet Farm and Home Loan Investigative Committee 

DENISE HALL, Employee 
Bars tow Veterans Home 

GEORGE MacCLANAHAN, Resident 
Veterans Home at Yountville 

JOHN SCHUMUCKER, Past Chairman 

Allied Council, Veterans Home at Yountville 

JESSE ORTA 
Veterans ' Advocate 

LIONEL DEW, Retiree 
United States Air Force 

COLONEL ARJINDERPAL S. SEKHON, M.D. 
U.S. Army Reserve 
American Legion 



ALAN AMARO 

Concerned Veterans for Better Government 

ROBERT DOLMAN, Past Chair 
California Veterans Board 

LYNNE JONES, Spouse 
California Veteran 

COLONEL FERNANDO V. GANDARA, JR., Victim 
Retaliation 

PHILLIS POWERS, former Executive Officer 
California Veterans Board 

ARTHUR BENTON, Past Vice Commander 
AmVets 

J. R. ESTRELLA 
Veteran 

SELSO VARGAS, Former Member 

Mexican American Veterans Memorial Commission 



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VI 

INDEX 

Page 

Proceedings 1 

Governor ' s Appointees : 

JULIE KORENSTEIN, Member 

Board of Governors 

California Community Colleges 1 

Background and Experience 1 

Questions by CHAIRMAN BURTON re: 

Strategies to Help Students 

Financially 3 

Questions by SENATOR LEWIS re: 

Little Hoover Commission 

Recent Recommendations 5 

Questions by SENATOR HUGHES re: 

Outreach to Inform Students of 

General Education Transfer 

Curriculum 6 

Questions by SENATOR KNIGHT re: 

Community Colleges as Vocational 

Schools 8 

Acceptable Transfer Rate from 

Community Colleges to Four- Year 

Institutions 8 

Motion to Confirm 9 

Committee Action 10 



Vll 



RICHARD H. LEIB, Member 

Board of Governors 

California Community Colleges 10 

Introduction and Support by 

SENATOR JACK ' CONNELL 10 

Background and Experience 10 

Questions by CHAIRMAN BURTON re: 

Coordination of Welfare to Work with 

Other Entities 11 

Questions by SENATOR HUGHES re: 

Getting Message to Students that 

They Can Apply for Financial Aid 12 

Motion to Confirm 13 

Committee Action 14 

LESLIE WANG, Member 

Board of Governors 

California Community Colleges 14 

Background and Experience 14 

Questions by SENATOR KNIGHT re: 

Requirement that Students Show 

Proof of Vaccinations 16 

Motion to Confirm 17 

Committee Action 17 

MARCY V. SAUNDERS, Member 

Occupational Safety and Health Appeals Board 18 

Background and Experience 18 

Questions by SENATOR LEWIS re: 

Previous Confirmation as 

Labor Commissioner 18 



Vlll 

Reason for Resignation as Labor 

Commissioner 19 

Rumors about Bank of America's 
Program for Employees to Clean 
Up ATM Areas 19 

Criteria Used to Appoint Administrative 

Law Judges 2 

Questions by SENATOR HUGHES re: 

Dangerous Molds in Private Homes and 

State Buildings 21 

Motion to Confirm 23 

Questions by SENATOR LEWIS re: 

Employers Responsible for Working 

Conditions at Home 23 

Committee Action 24 

TOMAS ALVARADO, Secretary 

Veterans Affairs 24 

Introduction and Support by 

SENATOR HILDA SOLIS 25 

Background and Experience 25 

Questions by SENATOR LEWIS re: 

Areas of Bars tow Home That Are 

Still Out of Compliance with 

DHS Requirements 28 

Thoroughness of Last DHS Inspection 29 

Monies Lost through the Home Loan 

Program 29 

Large Loss in Home Loan Applications 30 

Explanation for Voluminous Number of 

Charges and Complaints 31 



IX 



Questions by SENATOR HUGHES re: 

Plans for Alcohol and Drug Abuse 

Treatment Programs at Barstow 32 

Recommendations for Change 34 

Treatment for Dementia and Alzheimer's 34 

Screening and Placement of 

Veterans in Homes 35 

Complaints from Families of Veterans 

Regarding Treatment Received at Homes 36 

Questions by SENATOR O'CONNELL re: 

Future Plans and Funding Sources for 

Subsequent Development of More Veterans 

Homes 37 

Use of Recently Passed Bond Money to 

Build New Homes 39 

Role, as Secretary, over Bond Money 39 

Questions by CHAIRMAN BURTON re: 

Bond Money Meant for Veterans Homes 40 

Questions by SENATOR KNIGHT re: 

Possibility that California Could Pay 
Total Cost of Lancaster Home and Get 
Reimbursement from Federal Government 40 

Reasons for Stacks of Paperwork 

Opposing Nomination 41 

Hiring of a Probationary Medical 

Officer 41 

Questions by CHAIRMAN BURTON re: 

Lack of AA Facilities at Barstow 42 



Reason for Problems with Recruitment and 
Retention at Barstow Home 43 



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Request for Money in Budget to Help 
Veterans Deal with Alcohol and Drug 
Abuse 43 



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5 No Alcohol or Drug Dependency at Barstow 44 

6 Questions by SENATOR LEWIS re 
7 

Employee Morale at Barstow Facility 45 

Employees on Administrative Leave for 
9 Whistle-Blowing 45 

10 Questions by CHAIRMAN BURTON re 

Consultant Hired to Do Study 46 

j 

Number of Surveys that Barstow 

13 Did Not Pass DHS Inspection 47 



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How Is Protection Extended to 
23 Disabled Veterans to Protect Homes 49 



Cal-Vet Life and Disability 

Insurance Plan 47 

Number of Vets Who Lost Their Homes 

Due to Foreclosure under Plan 48 

How Agency Can Prevent Foreclosure 48 

Questions by SENATOR HUGHES re: 

Potential Number of Veterans Who May 

Lose Their Homes under the Plan 49 

Questions by CHAIRMAN BURTON re: 



Questions by SENATOR HUGHES re: 



How Secretary Personally Handles 
26 Problem of Threatened Foreclosure 5 



Temporary Solution 51 



XI 



Questions by CHAIRMAN BURTON re: 

Plans to Help Homeless Vets 52 

Any Commitment on Request for 

$15 Million 53 

Previous Help for Homeless Vets 53 

Plans for the $15 Million Request to 

Help Homeless Vets 53 

Reason Department Can't Provide Services for 
Homeless Veterans 54 

Reason for Not Requesting Funds in 

Budget to Provide Homeless Services 54 

Questions by SENATOR KNIGHT re: 

HR 2116 54 

Department Should Have Been Aware of 

Congressional Bill that Took California 

Off Priority List for Veterans Homes 55 

Witnesses in Support: 

JOHN FISKE, Vice Chairman 

State Veterans Board 55 

WILLIAM D. JACKSON, Commander 

American Legion, Post 855, Barstow Home 56 

DON HARPER, President 

California Association of Veterans 

Service Agencies 57 

Statements by CHAIRMAN BURTON re: 

Disappointment that Agency 

Didn' t Request Funds in Budget 58 

LARRY LATTMAN, Chairman 

Allied Council 

Yountville Veterans Home 59 



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JUDGE BROWN 

Veterans of Foreign Wars 62 

JOSE PEREZ, President 

Sacramento Hispanic Chamber of Commerce 63 

LAWRENCE McCABE 

Cafe de California 63 

GASPAR GARCIA, Commander 

American GI Forum, Sacramento 64 

RAFAEL SANCHEZ, Member 

Board of Directors 

United States Hispanic Chamber of Commerce 65 

JOSEPH MARTEL, M.D. 

California Latino Medical Association 65 

TED BURNETT, Labor Representative 

Bars tow Veterans Home 

California State Employees Association 65 

VIRGINIA MARI GOODMAN 

California State Employees Association 67 

VALERIE WILSON, Senior Steward 

Bars tow Veterans Home 

CSEA 68 

GRISELDA BARAJAS, Member 

California Hispanic Chamber of Commerce 69 

JOHN REECE, Commander 

District 13 , AmVets 69 

SYLVIA E. REYES, Chair 

Latina Network 

Sacramento Hispanic Chamber of Commerce 70 

LOUIS LOPEZ, Owner 

Printwise and Member, 

Sacramento Hispanic Chamber of Commerce 70 

MICHAEL OROSCO 

California League of United Latin 

American Citizens 70 



Xlll 



FRANK RAMIREZ, Representing State Commander 

American GI Forum 71 

MAURICIO LEIVA 

San Joaquin Valley Latino Vote 71 

Witnesses in Opposition: 

SAMUEL S. ORTEGA, Retired 

State Employee 71 

JOHN CANFIELD 

Veterans ' Advocate 78 

JOHN DEBBS, Vice Chairman 

Cal-Vet Farm and Home Loan 

Investigative Committee 80 

DENISE HALL, Employee 

Barstow Veterans Home 83 

Statement by CHAIRMAN BURTON re: 

No Retaliation Forthcoming 84 

Questions by SENATOR HUGHES re: 

Derogatory Statement 85 

Questions by CHAIRMAN BURTON re: 

Length of Suspension 85 

GEORGE MacCLANAHAN, Resident 

Veterans Home at Yountville 85 

JOHN SCHUMUCKER, Past Chairman 

Allied Council, Veterans Home at Yountville 94 

JESSE ORTA 

Veterans ' Advocate 94 

LIONEL DEW, Retiree 

United States Air Force 96 



XIV 



1 COLONEL ARJINDERPAL S. SEKHON, M.D. 

U.S. Army Reserve 
- American Legion 98 



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ALAN AMARO 

Concerned Veterans for Better Government 99 



5 ROBERT DOLMAN, Past Chair 

California Veterans Board 100 

LYNNE JONES, Spouse 

California Veteran 103 

8 

COLONEL FERNANDO V. GANDARA, JR., Victim 

9 Retaliation 104 

10 PHILLIS POWERS, former Executive Officer 

California Veterans Board 106 

ll 

12 ARTHUR BENTON, Past Vice Commander 
AmVets 

J. R. ESTRELLA 

Veteran 110 



SELSO VARGAS, Former Member 

Mexican American Veterans 

Memorial Commission 112 

Request by SENATOR HUGHES that MR. ALVARADO 

Have His Young Daughter Removed from 

Hearing Room 113 

Questions by CHAIRMAN BURTON re: 



2] List Employees Restricted in 

Excess of 15 Days 115 



Actions Taken by Whom 115 

Former Administrator, BOB GRAY 116 

Restriction of GANDARA 117 



XV 



Questions by SENATOR HUGHES re: 

Report in Sacramento Bee that 
ALVARADO Was to Be Terminated 
Just Before Resignation 117 

Questions by CHAIRMAN BURTON re: 

Assertion by BOB GRAY that Suspensions 

Were at Request of ALVARADO 118 

Questions by SENATOR HUGHES re: 

Accusations of Sexual Harassment 119 

Sensitivity Training 119 

Promotion of Individual Accused of 

Sexual Harassment 121 

Questions by SENATOR LEWIS re: 

Date BOB GRAY Was Relieved of Duties 121 

Questions by CHAIRMAN BURTON re: 

Statement Released Today of Death 

At Barstow Facility 122 

Questions by SENATOR HUGHES re: 

Refusal to Answer Letter to 

Concerned Veterans regarding Allegations 

Of Sexual Harassment 123 

Three Allegations of Sexual Harassment 124 

Recess of Hearing 125 

Certificate of Reporter 126 

Exhibits Submitted by: 

SAMUEL S . ORTEGA 127 

JOHN CANFIELD 140 

GEORGE MacCLANAHAN 147 






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P-R-O-C-E-E-D-I-N-G-S 
— ooOoo — 

CHAIRMAN BURTON: What we are going to do is to 
get rid of the less controversial matters first. So, Julie 
Korenstein, Board of Governors, California Community Colleges. 
Go ahead, please. 

MS. KORENSTEIN: Thank you very much. 

Good afternoon. My name is Julie Korenstein. 
I've recently been appointed to the Board of Governors by 
Governor Gray Davis. As a matter of fact, today is my second 
Board of Governors meeting. 

I've been involved in education for the past 30 
years, either as a parent raising my own three children, 
volunteering in their classrooms, as well as being a classroom 
teacher, having received both my elementary and my secondary 
credentials. 

I also ran my own private tutorial services, 
primarily working with students who had dropped out of school. 
And I actually put together a very special high school program, 
Exploratory Community Services, and I established that program 
over 13 years ago, before anyone really examined the importance 
of community services in our schools. 

And I'm very pleased and excited about the new 
position of Board of Governors. I believe that everything that 
I have accomplished has really helped me to arrive where I am 
today. 

I have also been on a board of education for the 

past 13 years. 



My greatest interests are in the following areas. 
Number one, improving the transfer rate. We, as the Board of 
Governors, must aggressively encourage our community colleges to 
ensure that a greater number of our students go on to get their 
Bachelor's Degree at the UC and CSU system. 

I want to see the expansion of classes our high 
school students take that are taught by our community colleges. 
I believe by doing this, we will help to encourage students to 
go on to community colleges upon graduation. And this will also 
help to enhance the transfer rates to our CSU and UC systems. 
By doing this, we will help to open horizons for many students, 
because college will be more affordable. And for many of our 
students coming from cultures of poverty, this will enhance 
their opportunities for success. 

I'm also a great supporter of vocational 
education programs. By doing so, we help to prepare the vast 
majority of community college students in the skills and 
training which prepare them to move into the work force and 
become productive citizens. It is extremely important for our 
students to gain viable skills that will enhance their ability 
to earn a living for themselves and for their families. 

I'm very interested in helping the transition of 
individuals who have been on welfare move into the work force. 
For many, attending our community college may be their only 
opportunity to change their lives and be able to have another 
chance. The majority of people who are on welfare are women 
with children, and so by helping them become trained in a skill 
or a profession, we not only help to break the cycle of poverty, 



but we also help the children who desperately need a chance to 
survive in a more nurturing environment. 

We must also make every effort to work with the 
business community and understanding what their needs are in 
terms of employment so that we establish programs that help the 
economic development of communities. 

Our community colleges play an important role in 
remedial education for students who need additional help. But 
of paramount importance to me, and of great concern to me, is 
really helping to encourage students to become teachers. We 
have a very serious teacher shortage in the State of 
California. The projections are that we will need approximately 
27,000 teachers each year for next 10 years, 270,000 teachers. 
We need to aggressively attract the very best students and help 
them, encourage them, to become our teachers. What better place 
than our community colleges. 

These are some of the areas of interest that I 
have. I am very pleased and excited, and hopefully will get the 
confirmation so I can continue on with many of the ideas, and 
areas, and issues that I've been working on. 

Thank you very much. 

CHAIRMAN BURTON: Thank you. 

The Community College Board of Governors can 
raise students fees for neediest students, but they still don't 
have, many of them wouldn't have enough money to live on while 
they're going to school. 

Do you have any idea what strategies the Board 
should pursue to help pay for living expenses in order to 



increase their education? 

MS. KORENSTEIN: Right. 

I think it's very difficult to really go about 
increasing the amount of money students pay. The community 
college system, we have a lot of students that are working 
people, and they don't have the really financial opportunities 
and resources. 

There are grants that the Community College Board 
of Governors gives out to students. There's also, I think, a 
current bill that will help to increase or help give money 
towards students for their books, which I think is going to be 
very important. 

Our greatest hope is to be able to give 
opportunities to these people that are in our community college 
system. And we have to find a variety of different ways to give 
economic support. 

CHAIRMAN BURTON: Do you have any ideas? 

MS. KORENSTEIN: Well, I was just mentioning, 
there are grants that the Board of Governors — 

CHAIRMAN BURTON: And three percent of the 
students get them. 

MS. KORENSTEIN: Right, that's true. 

CHAIRMAN BURTON: Which means 97 percent don't. 

MS. KORENSTEIN: Right. I would certainly look 
at expanding the grants that the Board of Governors give out. 

And I think that legislatively having sources of 
funding for additional monies for textbooks is very important 
for our community college students. 



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So, those are the two areas that I think can be 
very helpful, as well as the support groups in terms of having 
child care programs and other services through care. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: The Little Hoover Commission had 
recently issued a report on the state of community colleges. 
They issued a number of interesting findings. 

One of them was that almost 20 percent of the 
students enroll in a class but don't finish. And then their 
recommendation for that is that there be a gradual increase in 
the student fees for the students who do that, and then perhaps 
use that money to give a greater break to those who are diligent 
in their studies. 

What do you think about an approach like that? 

MS. KORENSTEIN: I did go through the report. 
What I would really like to see is a statistical evaluation of 
the type of student that does not complete, and why they don't 
complete their course work. Is it because they're just playing 
around, and they have no better interests than to really stay in 
college and be a serious student? Are they discontinuing for a 
period of time because they have to hold a full-time job to 
support a family? 

I think there's a — there are many different 
types of students. 

I guess what the report was saying, that students 
that tend to not complete courses — and I don't know if they 
mean one time or a percentage of times — that they be, in some 
way, held responsible, and I guess it's sort of a punishment. 



You know, you take money and you give it to students that are 
more serious. 

But I would really have to evaluate who we're 
talking about. It wasn't clear in the report, more 
specifically. 

SENATOR LEWIS: Questions, Members of the 
Committee? Senator Hughes. 

SENATOR HUGHES: Hi, how are you? 

MS. KORENSTEIN: Fine, thank you. 

SENATOR HUGHES: I'd like to know how many 
students are really part of the inter-segmental general 
education transfer curriculum? How do students get to know 
about this? 

Because some students get to know everything 
because they have good connections, they have friends who are in 
the transfer program, and others never, ever hear anything about 
it. 

What kind of outreach do you have on the campuses 
themselves to find out how they can get such courses? 

MS. KORENSTEIN: Senator Hughes, it's — being 
that I'm relatively new to this position, there's a great deal 
that I'm in the process of learning. 

We have to make an aggressive attempt to make 
sure that students are clearly aware of the transfer policies, 
and whatever we can do to help move them along. 

But in order to tell you percentages, and all of 
that, I still need a lot of homework. 

SENATOR HUGHES: No, I didn't mean percentages. 



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I'm just wondering how do students really find 
out about it? Do you have counselors that are available to 
students in the sense of more of your students are more mature 
and are older students. They're more dedicated to trying to 
work and go to school. And they think that they need to stay 
there and get that AA Degree, when really, some of them need to 
have their sights raised to a higher level. 

MS. KORENSTEIN: Absolutely. As a matter of 
fact, we just today, the Chancellor from the community college 
system, as well as the CSU system, signed a memorandum of 
understanding to increase the transition rate, the transfer 
rate. And we have already done that with the UC system as 
well . 

It has to be a very cooperative venture, and we 
do have to make sure that the counselors are spending the time 
and providing the information. 

I know we all just received posters that the 
community colleges will be putting up in terms of the 
transferring over to the USC system. So, we have to make sure 
the students understand and know, because ultimately, we want 
them to go on and get Bachelor's Degree. We want them to be 
able to go into fine professions and make good livings for their 
families and for themselves. 

So, it's going to have to be a very aggressive 
job on our part. 

SENATOR HUGHES: Thank you. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: Thank you, Mr. Chairman. 



8 

Recent figures indicate that only about three 
percent of the community college students transfer to a 
four-year school. 

Can you hear all right? 

MS. KORENSTEIN: Thirty percent of the students 
go on to a -- 

SENATOR KNIGHT: No, only three percent of the 
community college students transfer to a four-year institute. 

Does that indicate, and I think rightfully so, 
maybe, what some of us are thinking, that the community college 
is more of a vocational school and satisfies that niche in 
providing a vocation for people to make a living after they come 
out of high school? 

MS. KORENSTEIN: I think, if I heard your 
question correctly, you were saying, should our community 
colleges be looked at as a vocational school if we're only 
transferring only 3 percent on to the CSU and UC system. 

I think the community colleges can play many 
roles, many roles. It can be vocational, but we also want to 
give students the opportunity to go on to get their Bachelor's 
Degree . 

Like I said before, we have to make an aggressive 
attempt to encourage them to go on. Many of our students are 
coming out of cultures of poverty. They can't often afford to 
go on to UC or CSU systems. This gives them the opportunity for 
the first two years at a lower cost. 

SENATOR KNIGHT: What percentage would you think 
would be acceptable, then, for community college students to go 



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on to higher learning? 

MS. KORENSTEIN: I mean, my dream and my wish 
would be, there would be a minimum 50-50. That 50 percent would 
be going for getting their certificate in terms of voc. ed., and 
50 percent would transfer on. That's what I would like to see. 

SENATOR KNIGHT: Is that 50 percent of the 
students coming right out of high school, or 50 percent of the 
overall population of the community college? 

MS. KORENSTEIN: I would say out of the overall 
community college. That would be my desire. 

CHAIRMAN BURTON: Senator O'Connell. 

SENATOR O'CONNELL: No questions. 

CHAIRMAN BURTON: Witnesses in support. 
Witnesses in opposition. 

Do you have anybody to introduce? 

MS. KORENSTEIN: No. 

SENATOR HUGHES: I'd like to move the nomination. 

CHAIRMAN BURTON: Moved by Senator Hughes. Call 



the roll. 



SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 



10 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Ayes five, noes none, 
congratulations . 

MS. KORENSTEIN: Thank you very much. 

CHAIRMAN BURTON: Rich Leib. 

SENATOR O'CONNELL: Mr. Chairman, I just wanted 
to state, as Mr. Leib comes forward, he's been a personal friend 
of mine for 20 years. He's a graduate of UC Santa Barbara. His 
mother's a teacher, I think just recently retired from Los 
Angeles . 

Rich used to work for Senator Hart, Senator 
Rosenthal, and very active in the high technology. 

CHAIRMAN BURTON: Are you recusing yourself? 

SENATOR O'CONNELL: — high technology, and he's 
just a great appointment. 

I just wanted to lend that personal introduction, 
long-time friend. 

MR. LEIB: Thank very much. I appreciate that. 
I won't take up too much time, but I'd certainly 
be happy to answer any questions. 

As Senator O'Connell stated, I'm a product of the 
public school, having attended Hamilton High School and also UC 
Santa Barbara. And my mother was a teacher at Venice High 
School for 25 years, and I've always been a strong believer in 
the public education system. 

And when I got out of college, my first job was 
with State Senator Gary Hart, and working on — as an 



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11 

administrative or legislative aid. 

So, I've always had that interest, and I'm 
looking very much forward to the community colleges. I think 
it's an institution that has great potential, and I think that 
we're seeing a board that is going to be very pro-active and 
work closely with the Legislature. And fortunately, we have 
strong support in the Legislature on the community colleges, and 
I hope to just continue with that, and answer any questions you 
may have. 

And I thank you very much, Senator O'Connell. 

CHAIRMAN BURTON: Well, I guess it's not fair to 
ask the newer members, but there's some concern with the fact 
that we made the community colleges, I guess, the repository for 
the Welfare to Workforce Investment Act. 

Do you know, Rich, do you know how that works? 
Do they coordinate with other people, or are they just like the 
typical, and they just operate the thing totally themselves? Do 
you have any idea how that works? 

MR. LEIB: It hasn't actually been an issue. 
We've heard some discussion at the previous Board meeting about 
that issue. And clearly, it's something that has been talked 
about a lot in the press; there's been some interest in it. 

We haven't dealt that closely with it. It's 
certainly some issue I'm interested in, in making sure that 
we're able to work closely with the various entities and have- 
people graduate. 

I think what the most important thing about the 
Welfare Back to Work Program is to make sure we get good 



12 

education, and I think that the community college is one area 
where they can do it. 

I don't have a lot of experience with it/ but 
it's certainly an issue that I think 1 s important and emerging. 

CHAIRMAN BURTON: Senator Lewis. Senator Hughes. 

SENATOR HUGHES: I have some statistics here that 
say about 96, 000 students in community colleges statewide were 
on welfare, yet they did not apply for financial assistance. 

How are you going to get the message out there? 
I know it's like people who are on welfare don't want to be 
rejected again by society and hold their hands out, but yet and 
still, they want to better their conditions. 

How are you, as a trustee, going to make certain 
that students know it's their right to apply for assistance if 
they want to finish community college and even go on to other 
education? If they could reach their academic goal right in the 
community college, that there's some way that they could be 
entitled to some grant? How do you get that information out? 

And as a new member, I'm sure you have some 
creative ideas. 

MR. LEIB: Well, I do think that getting the 
information out is one of the great — or the lack of getting 
the information out is one of the great frustrations that are 
faced by community college students as well as in other 
educational institutions. 

There is a lack of information, not only on that, 
but on their ability to gain funding. And I know, for example, 
one of the things we're interested in is support of measures for 



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the expansion of the Cal Grant Program, B Program, that Senator 
Burton has authored, and it's something that we are in favor 
of. 

But I think that, you know, having the 
information, I mean, having that ability, you still have to be 
able to get out the information. And, you know, in this 
generation, with the computers and e-mail and so forth, there 
has to be some creative solutions to that, because a lot of 
people just don't have the information. 

I don't have the answers to it, but I understand 
the concern that you have, and I'd certainly be interested in 
trying to do something about it. 

SENATOR HUGHES: Yes, when you talk about e-mail, 
it's just not enough to say, I love you, but maybe it should 
say, these are where you can get financial aid. 

So, maybe the community colleges ought to start 
thinking about that kind of virus invading the e-mail. 

CHAIRMAN BURTON: Senator Knight. Senator 
O'Connell. 

SENATOR O'CONNELL: I'd like to move the 
nomination. 

CHAIRMAN BURTON: Do you have witnesses in 
support? 

MR. LEIB: I had my one witness in support. 
I'm resting my whole nomination on Senator O'Connell. 

CHAIRMAN BURTON: Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 



14 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 

CHAIRMAN BURTON: Congratulations. 

MR. LEIB: Thank you very much. 

[Thereupon the Senate Rules 
Committee acted upon legislative 
agenda items . ] 

CHAIRMAN BURTON: Leslie Wang. 

MS. WANG: Good afternoon. As you know, my name 
is Leslie Wang. It's actually spelled "Wang" but pronounced 
"Wong." 

CHAIRMAN BURTON: I apologize for pronouncing it 
"Wang." 

MS. WANG: It's all right. It's a battle I've 
been fighting my entire life. 

As you know, my name is Leslie Wang. I'd like to 
tell you a little bit about myself and what I bring to the 
Board of Governors. 

I've lived in the Central Valley for 26 years, 25 
of that in Stockton, and last year I moved to Gait. 

I've been working at the San Joaquin Delta 



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Community College District since 1980. I was hired as a library 
assistant, and now I'm a media specialist, and this is the 
position I currently hold. 

As you can see, I have a very long history in the 
community college system. I was there for Prop. 13, and I saw 
the effects of that. And I was also there to see the effects of 
AB 1725. 

I've been very active for several years in 
participatory governance, and I've been an advocate for 
classified professionals through my committee work with the 
California School Employees Association, on the statewide 
Community College Committee. 

I've also been a student at the community 
college, so I've had the experience first-hand of standing in 
line and going through the registration process, and paying 
those big bucks for the textbooks. 

But I do have to say that I like the new system 
of registration now on the Internet much better. It's much 
easier. 

And I have had the opportunity to work very 
closely with students and faculty, and classified and 
administrators . 

Very briefly, just one thing that I've noticed 
about the students of today. They have different expectations. 
They're very much more sophisticated in what they want from 
their educations at the community college. They don't have a 
lot of time. They all work. They have family obligations. And 
so, they need a different type of delivery for their classroom 



16 

education. Some of it's technology based; some of it's distance 
education. 

And I bring that up because that's the field that 
I work in. And years ago, state of the art was a tv and VCR. 
Now it's multi-media presentation systems, distance education 
through video conferencing over the T-l lines through the 4-C 
Net video bridge, and numerous other means of access. That's 
really what it's about. 

I think we need to be very sensitive to the types 
of learning styles that our students have, and we need to 
provide them access so that they have the opportunity to take 
advantage of the community college education, whether their goal 
is to transfer or to get into the workforce. 

The colleges, college system, has responded as 
well as it could to these new demands, despite the challenges of 
limited funding in the past decade. But I'm optimistic that the 
next decade will see some improvement. 

Rather than continue on, I'll just ask you if you 
have some questions of me, and I'll do my best to answer them. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: No questions. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: No questions. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: I was going to ask a question. 

I had heard in Cal State University at Northridge 
that they're asking measles vaccine and Rubella vaccine before 
students, proof of it, before they can be registered in the next 



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quarter or next semester. 

Do you have any of those requirements within the 
community college district? 

MS. WANG: Not that I'm aware of. I do know that 
the employees do have — are required are to take a tuberculosis 
test every — I believe it's every four years. 

SENATOR KNIGHT: Who is that? 

MS. WANG: The employees. 

SENATOR KNIGHT: But you don't have any 
requirement on students? 

MS. WANG: Not that I'm aware of. 

SENATOR KNIGHT: Okay, thank you. 

CHAIRMAN BURTON: Senator O'Connell. 

SENATOR O'CONNELL: I'll move the nomination. 

CHAIRMAN BURTON: Witnesses in support? 
Witnesses in opposition. 

Moved by Senator O'Connell. Call the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 

SENATOR O'CONNELL: Aye. 

SECRETARY WEBB: O'Connell Aye. Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Five to zero. 



18 

CHAIRMAN BURTON: Congratulations. 

MS. WANG: Thank you. 

CHAIRMAN BURTON: Marcy Saunders, Occupational 
Safety and Health Appeals Board. 

MS. SAUNDERS: My name is Marcy Saunders. I 
reside in San Mateo County. 

I have been before you before. I'm not going to 
bore you with my background, since most of you have heard my 
background before. 

I guess the best thing I could say is that I was 
the Labor Commissioner for the State of California and have 
since resigned. And as you know, the Governor's now appointed 
me to the Cal-OSHA Appeals Board, of which I do have some 
background because I do come from somewhat of a construction 
background for 15 years, where we were working with Cal-OSHA on 
many issues. And then also in the year that I was Labor 
Commissioner, I also worked pretty closely with the Cal-OSHA 
Division. 

And I will tell you that I do look forward, if I 
am confirmed, to working on the State Appeals Board. 

Thank you. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: You were confirmed by the Senate 
to the post of Labor Commissioner last year; correct? 

MS. SAUNDERS: Yes. 

SENATOR LEWIS: Then this past March, you 
resigned from that post? 

MS. SAUNDERS: Yes, I did. 



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SENATOR LEWIS: Can I ask why you chose to 
resign? 

MS. SAUNDERS: Yes. I took the job extremely 
seriously. It was very, very time consuming. I did not realize 
just how time consuming it was going to be. 

I was newly married. I very rarely ever saw my 
husband. We had a long conversation about this. 

And whenever I take on any type of position, I 
try to do it as well as I possibly can. 

I was so involved in that position, trying to 
turn things around within the division. And I think that I did 
some very, very good things in the year that I was there. 

But I just felt that it needed to have someone in 
that position that could give it the 60 to 80 hours a week that 
I was doing. 

SENATOR LEWIS: So, it's been your experience so 
far that the OSHA Appeals Board is less time consuming? 

MS. SAUNDERS: It is less time consuming. It 
does not have 500 employees and 22 offices statewide, to begin 
with. 

SENATOR LEWIS: Can you shed some light on this 
controversy? I guess there's been a lot of rumors flowing about 
something that transpired with the Bank of America? 

MS. SAUNDERS: Yes, there are a lot of rumors 
flying, aren't there? 

Not really. I really don't have anything I could 
comment on that, except that, as Labor Commissioner, I abided by 
what the state laws were, and suggested to Bank of America that 



20 

they change their program. 

SENATOR LEWIS: Which program was that? 

MS. SAUNDERS: There was a program they were 
asking their employees to volunteer to clean up the ATMs on 
their own time and purchase the tools themselves. 

SENATOR LEWIS: And you felt that that deserved 
overtime, I take it? 

MS. SAUNDERS: Yes. As long as they were 
nonexempt employees, the law reads that they have to be paid for 
all hours that they work. 

SENATOR LEWIS: Did the Governor share your 
opinion in that regard? 

MS. SAUNDERS: I don't know. I never talked to 
the Governor directly about that. 

SENATOR LEWIS: And the Governor didn't ask you 
to resign? 

MS. SAUNDERS: No, I resigned. 

SENATOR LEWIS: One of the functions of a member 
of the OSHA Appeals Board is the ability to appoint and hire 
administrative law judges. 

What's going to be your criteria in terms of 
hiring those people? 

MS. SAUNDERS: I don't think that that's a 
question that I can honestly answer right now. I'm still 
learning about Cal-OSHA Appeals Board. I've only attended three 
meetings so far. I'm still just learning the laws, what the 
past policy of the Board has been. And in fact, I'm just 
beginning to learn the names of our administrative law judges 



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and our attorneys. 

SENATOR LEWIS: Are you going to insist that the 
appointees share a common philosophy with you? 

MS. SAUNDERS: I'm only one of a three-member 
board. And I would expect that whoever is hired by the Board 
would want to share the philosophy with the Board as a whole. 

SENATOR LEWIS: Very Davis-like. 

CHAIRMAN BURTON: Do they come off a list, those 
administrative law judges? 

MS. SAUNDERS: Yes, they do. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: You're aware of the number of 
complaints that we have about dangerous molds being discovered 
under private homes, and especially the number of dangerous 
molds that have been discovered in state buildings. 

SENATOR KNIGHT: Moles? 

SENATOR HUGHES: Molds. Things that make you 
sick, m-o-l-d-s. Sorry, it's my Eastern accent. 

And I was wondering, what is your division going 
to do, if anything, about looking into this? Because I have 
some friends who bought a beautiful house about four or five 
years ago, and then discovered they had these molds under their 
home, and they had to vacate. 

And there have been complaints from state 
employees about conditions that they might have gotten from 
molds associated from state buildings. 

Are you going to look into that, or is your 
agency looking into it? 



22 

MS. SAUNDERS: Well, first of all, I'd have to 
find out if that issue's under our agency's purview, because I'm 
not positive that it is. 

But if it was under our purview, then of course, 
I would think we would look into that. 

SENATOR HUGHES: But it says, Occupational Safety 
and Health. And I would imagine that someone would probably 
come to your Board to render a claim. 

Don't you think it might be? 

MS. SAUNDERS: Yes, there's a very good chance 
that if that was a problem in a building, and it was causing a 
problem, that we would probably get a complaint, which would go 
to the Division first. 

Then the Division would look into that issue, not 
our Board per se, but the Cal-OSHA Division would look into it. 
And then, whatever the Division decided as to whether or not 
they were going to cite the people that owned the building, or 
the employer, or whatever, then at that point, the employer has 
the right to appeal that to our Division, and then we, at that 
point, would have an opportunity to look into it. 

SENATOR HUGHES: Are you concerned about it? 

MS. SAUNDERS: Of course. 

SENATOR HUGHES: I'm very concerned about it 
because of the number of people that I know who work for the 
state, and the number of people I know that go in and out of 
these buildings. 

I hope you get even more excited about it, 
because it's really a scary situation. 



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MS. SAUNDERS: I promise you that within what is 
my legal rights to do, I will talk to the Division about that. 

SENATOR HUGHES: And find out. Thank you. 

MS. SAUNDERS: You're welcome, Senator Hughes. 

CHAIRMAN BURTON: Witnesses in support? 
Witnesses in opposition. 

SENATOR HUGHES: Move the nomination. 

CHAIRMAN BURTON: Moved by Senator Hughes. 

Do you have anybody around you want to introduce 
to the Committee? 

MS. SAUNDERS: My husband, Gary Saunders. 

CHAIRMAN BURTON: Another question from the good 
Senator. 

SENATOR LEWIS: Thank you, Mr. Chairman. 

The Federal Labor Department had put forth an 
advisory, saying employers were responsible for working 
conditions at home. And then there was a large protest about 
that. The advisory was withdrawn. 

But Chief Counsel for OSHA has said that, "The 
portion of the home where work is carried on must be in 
compliance with the California Occupational Safety and Health 
Act . " 

To your knowledge, has any person who's working 
at home ever turned himself in? 

MS. SAUNDERS: Well, again, to be very, very 
honest with you, I have not been sitting on the Board that 
long. I've only had three hearings. 

And at this point, I would have to say I have no 



24 

idea whether anybody has or not. I'd have to go back and find 
out . 

CHAIRMAN BURTON: Moved by Senator Hughes. Call 
the roll. 

SECRETARY WEBB: Senator Hughes. 

SENATOR HUGHES: Aye. 

SECRETARY WEBB: Hughes Aye. Senator Knight. 

SENATOR KNIGHT: Aye. 

SECRETARY WEBB: Knight Aye. Senator O'Connell. 
Senator Lewis. 

SENATOR LEWIS: Aye. 

SECRETARY WEBB: Lewis Aye. Senator Burton. 

CHAIRMAN BURTON: Aye. 

SECRETARY WEBB: Burton Aye. Four to zero. 

CHAIRMAN BURTON: Hold the roll open for Senator 
O'Connell . 

Thank you, Marcy, and congratulations. 

Are you term or pleasure on this' one? 

MS. SAUNDERS: I'm term. 

Thank you everyone. 

[Thereafter, SENATOR O'CONNELL 
added his Aye vote, making the 
final vote 5-0 for confirmation.] 
CHAIRMAN BURTON: Tomas Alvarado, Secretary, 
Veterans Affairs. 

Mr. Alvarado. 

SENATOR SOLIS: Good afternoon, Mr. Chair. 

CHAIRMAN BURTON: Senator Solis, you're here on 



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this item? 

SENATOR SOLIS: Yes. 

I am happy to be here to present Mr. Tomas 
Alvarado, who has been nominated as Secretary for the California 
Department of Veterans Affairs. 

He's been a long time friend and activist out in 
the East Los Angeles area in terms of helping to provide 
assistance to veterans and to our community. 

And I stand here as someone who has known him in 
the last few years and worked with him this past year, during 
month of December, particularly at the Barstow Home, when I and 
staff went out and took a visit, reviewing what some of the 
issues were there. And came to see that there were some much 
needed reforms that were needed, and saw that he took the bull 
by the horn and did what he needed to do to help provide those 
kinds of reform efforts. 

So, I'm here to say that he's someone that I 
think has demonstrated his courage and his commitment to his 
community, and I think will do a continued good job for us 
serving as Secretary for the California Department of Veterans 
Affairs. 

I also have a letter that I believe many of you 
have seen from Congresswoman Lucille Roybal Allard, who also 
represents the East Los Angeles area, and also joins with us in 
support in confirmation for Mr. Tomas Alvarado. 

MR. ALVARADO: Thank you very much, Senator 
Solis. 

Good afternoon, Mr. Chairman and Members. Thank 



26 

you for this opportunity to come before you this afternoon to 
respond to any questions, issues, or concerns you may have 
regarding the administration of the Department of Veterans 
Affairs since my appointment. 

First, Mr. Chairman, with your permission, I 
would like introduce my wife, Christina, and daughter, Miranda, 
sitting right behind me. Both my wife and Miranda have had an 
interesting learning process this last year or so. So, I really 
appreciate their support for me, and all the long hours, and 
nonexistent weekends that I've not been home and being on the 
road. 

Although I'd like to introduce all of my 
supporters here today, however, in the interest time, I think 
their mere presence is sufficient. I thank them all for the 
demonstrations of support and confidence this afternoon. 

I would, however, like to introduce specific 
persons, Mr. Chairman, who would like to comment in support of 
my confirmation, if it's okay with you, sir. 

John Fitzke, past Commander for the Veterans of 
Foreign Wars and Vice Chairman of the California Veterans Board, 
is here representing our state Department Commander. 

Bill Jackson, representing the Barstow Home and 
the State Commander of the — 

CHAIRMAN BURTON: Well, I tell you how we do it. 
You testify. We ask questions. We ask for support, they'll 
come up . 

MR. ALVARADO: All right, yes, sir. 

CHAIRMAN BURTON: You can stay there, sir. 



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MR. ALVARADO: Mr. President and Members, I hope 
that you had the opportunity to review baseline report delivered 
to your office March 31st of this year. The information 
contained in this package was to serve as a sample for some of 
the problem areas we discovered, how they were resolved, and 
generally the progress that has been made since my appointment 
as Secretary. 

And as requested by your staff, I also provided 
you and the Members of this Committee with an additional 
document which provides a framework for some of my intended 
short and long term goals. 

Mr. President, over the past three decades, I 
have been committed to improving the quality of health care and 
enhancing benefits for veterans and their dependents, 
particularly disabled combat veterans. After nearly 30 years of 
professional and volunteer service to this cause, I am committed 
and continue to apply the same tenacious energy I exercised as a 
student organizer for veterans at San Jose State. 

I want to dismiss all and any doubt that the 
veterans in our homes are being neglected or abused. I have 
personally engaged in a pro-active role in this effort, and I 
will continue to do so. 

I will not allow this agency to lose sight of our 
commitment to the men and women who served, as well as their 
dependents . 

I want to assure you, Mr. Chairman and Members, 
that this agency is staffed by professional and competent 
employees that genuinely care about the veterans we are charged 



28 

to assist. 

Lastly, any statements, rumors, or hearsay should 
be viewed or handled cautiously. I know there's a number of 
things that have been circulated, and I hope that they are 
viewed with some degree of caution. 

In this regard, Mr. Chairman and Members, I hope 
that the testimony you'll receive from me today will provide you 
with the necessary information you need to recommend approval of 
my confirmation to the full Senate. 

Thank you. 

CHAIRMAN BURTON: Senator Lewis. 

SENATOR LEWIS: Mr. Alvarado, I understand that 
the Barstow Veterans Home recently passed its last DHS 
inspection? 

MR. ALVARADO: That is correct. 

SENATOR LEWIS: But there are still some areas 
that are outside of compliance. Do you recall what the major 
ones out of compliance were? 

MR. ALVARADO: Yes, sir. 

SENATOR LEWIS: What steps are being taken? 

MR. ALVARADO: The major problems that we saw, at 
least that I saw, and that was documented during the course of 
this last survey, was the documentation. It was the lack of 
documentation by the doctors and other medical staff. 

And we brought on board different personnel and 
consultants, expert consultants, to help us out and train these 
people in how to provide a better documentation process, because 
we got dinged on pretty much most of that. I think about 85 



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percent of our citations were in regards to the lack of proper 
documentation . 

SENATOR LEWIS: How thorough was the DHS 
inspection? How many different buildings house the veterans 
with medical problems? Did they physically go into each and 
every one of them? 

MR. ALVARADO: No. There's one — there's the 
administration building, where we have what we call the pods. 

And there's, I believe there's four wings, and 
the different type of skilled nursing. So, they all have 
different applications applied to them. 

In essence, they're all centered around the 
administration building. It's just a quad pod. 

They don't go into the living facilities. That's 
independent living. 

SENATOR LEWIS: DHS inspectors went into every 
wing that housed — 

MR. ALVARADO: Only where the medical application 
was taking place at skilled nursing. 

SENATOR LEWIS: I wanted to ask you just a little 
bit about the home loan program. 

My understanding is, it's lost money the last 
seven years. Is that correct? 

MR. ALVARADO: No, sir. That's not my 
understanding . 

As a matter of fact, we've probably lost in the 
last few years, ever since the interest rate on the outside went 
down, we lost a significant number of individuals, about 40,000, 



30 

who chose to refinance their homes through outside — because 
the outside interest rate was lower. 

But since -- the over last couple of years, 
particularly over last year, the Department has actually made in 
excess of $40 million in home loans per month. And we're 
getting, quite frankly, overwhelmed with the number of loans 
they're applying for. 

SENATOR LEWIS: Well, the information I have says 
that in 1980, the Cal-Vet program handled 120,000 loans, and as 
of December, '99, we're now at 33,000 loans. 

MR. ALVARADO: It's 32,000, Senator. Yes, that's 



correct . 



loss? 



SENATOR LEWIS: What accounts for that large 



MR. ALVARADO: First of all, a lot of the loans 
are being paid off. 

And the interest rates, as I said, certainly 
attracted a sizeable number of veterans to refinance their homes 
through the outside banking industry, which was a lot lower than 
we were back in the '80s. I'm sorry, back in the last three or 
four years — four or five years. 

We have now an interest rate that's significantly 
more attractive than the commercial rates on the outside. It's 
about 6.59 compared to the outside interest rates, so it's a 
little bit higher than that, about 8 percent more. 

SENATOR LEWIS: Lastly, you alluded to this, but 
in the course of hearing about your nomination, I, and I assume 
all the other Members of this Committee, have been certainly 



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inundated with lots of paperwork, both pro and con, to your 
confirmation. 

But your opponents, at least some of your 
opponents, have criticized you, and they've alleged a number of 
things, including that promotions were based on favoritism. 
That there was retaliation against employees who made formal and 
informal complaints. There seem to be a rather voluminous 
number of these charges that are floating around. 

What do you think accounts for all this? 

MR. ALVARADO: Well, Senator, I don't know. But 
I can tell you that in my 30-some-odd years of professional — 
in this profession, working as a supervisor and/or staff person, 
or in any kind of supervisorial management position, I've never 
practiced that kind of work environment. 

I don't want to make our department a scapegoat. 
I want to maintain and bring back the integrity. As a matter of 
fact, I quite frankly am a little confused at people saying 
that, because it's very important for me to maintain the 
integrity of this agency. I know it's been a scapegoat for a 
lot of people to point fingers at, that the Department has run 
amok. I don't believe that's the case. 

I don't do that kind of intimidation, Mr. Lewis. 
I don't condone it. If I find anyone that's doing it, I will 
take serious and quick action on it. 

As a matter of fact, last year, when I read these 
letters, these anonymous letters that were coming to my 
attention, I asked an outside consultant to come in and do a 
study, an assessment, on the number of complaints that have been 



32 

lodged against anyone in this Department. 

And the consultant went back ten years and found 
absolutely no complaints of that nature existed that were 
formally filed. 

If those kind of allegations were levied toward 
me, Senator Lewis, I have no idea why they're doing it; I really 
don' t . 

But I can assure you, that's not my practice. I 
don't like to establish hostile working environments. I don't 
like to work in one, nor would I practice that kind of — 

SENATOR LEWIS: Thank you. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Many of the people who are 
residents of your homes will have one kind of problem or the 
other, like alcohol and drug abuse. And I understand that 
Yountville Home currently has a licensed drug and alcohol 
treatment program. And yet and still, you don't have anything 
similar to this at Barstow. And you really tell people to go 
out and get these resources. 

I mean, what are your plans? What have you 
planned? 

If a person is a resident of your institution, 
then they don't have a lot of choices to make. They can't say, 
I want to be transferred, nor would they know, even, that 
another veterans home had this capacity. 

What do you do? How do you determine which homes 
will treat that way and which homes will refer out for other 
treatments? And is this fair to the veteran who has given their 



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lives to their country, to have them really ignored and treated 
in a different manner from one institution to another? What's 
your feeling about that, and why is it so? 

MR. ALVARADO: Senator, it's not fair. And we 
have — Yountville, as you know, is 116 years old. And they are 
far better prepared to deal with a larger scope of veterans that 
are in our community. 

With Barstow, the only resource we have is making 
sure that if an individual has an alcohol problem, for example, 
we need to make sure that they are — they participate in the 
Alcoholics Anonymous program. 

The previous administration wasn't — didn't have 
the vision, I believe, to replicate that same program to become 
available for our veterans in Barstow. 

And in Chula Vista, they also have that same 
option, but Chula Vista has more immediate resources for ongoing 
counsel — 

SENATOR HUGHES: But then, Chula Vista is new. 

MR. ALVARADO: That's correct. 

SENATOR HUGHES: What about Barstow? 

MR. ALVARADO: Barstow, we have to go back and 
revisit — a lot of things were done wrong in Barstow, Senator. 
Lots of things. There were so many short cuts taken in Barstow, 
both programmatic and in infrastructure that there's a lot of 
things to fix, and we have to get there. We are going to do 
that. 

SENATOR HUGHES: So, since you've been there a 
short period of time, how long? 



34 

MR. ALVARADO: A year. 

SENATOR HUGHES: So, what are your 
recommendations for change as you seek to stay there longer, and 
you see these inequities? What are your plans, and what are 
your recommendations? And what have you done try to make these 
recommendations a reality? 

MR. ALVARADO: The immediate plans that I looked 
at, Senator, were specifically to improve the quality of care 
for our members. And we're doing that as a first step, because 
we feel that's more important right now at this point, to obtain 
highly qualified individuals to apply the medical attention to 
our veterans. 

And we need nurses; we need doctors; we need 
other staff. We need quality assurance individuals. Once we've 
placed that in the foundation, we can take the next step forward 
and move on with additional needs that we may have and require. 

So right now, my principal priority is to make 
sure that we have the quality staff there that we need to help 
out in areas that we are lacking individuals, such as registered 
nurses . 

SENATOR HUGHES: What about dementia and 
different types of dementia? And specifically I think about 
Alzheimer's, specially for someone who has faced combat, and who 
has had a lot of tension in their lives. 

How do you keep these veterans from wandering off 
the sites? 

How many cases have you had, if any, that you 
kept track of in your short tenure of veterans who have escaped 



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and gotten lost? 

When I say escaped, escaped their environment, 
became disoriented because they didn't know where they were? 

Do you have any plans for these? 

MR. ALVARADO: Yes, ma'am, we do. 

The Governor has — and this thought came way 
before the Governor created the Blue Ribbon Task Force. 

As you know, Members, Mr. Chairman and Members, 
the Governor created this task force with one specific task, or 
with number of tasks, but one of them was to look into the 
possibility of providing Alzheimer's and dementia health care to 
our veterans. 

And they're in the process right now of 
evaluating those needs and basically where those sites should 
be. 

In Barstow, we have a limited, very limited, 
capability to do that, very limited. But we have a small 
dementia unit that we just recently opened. It's indoors. 

The biggest problem we have is the ability, the 
ability to be able to care for them. We don't have that 
capability at either one of the homes. 

SENATOR HUGHES: How do you decide, once a family 
of a veteran comes, or the veterans themselves, you know, who 
may be a lot healthier than some of the people out here in the 
street, and decide that they want to stay there. 

Do you say to them, we don't have the facility to 
take care of you, and maybe you'd be better served by going to 
another veterans home? 



36 

Do you have some sort of screening, or something, 
in their placement? Or, do you just honor their first request? 

And what do you feel your responsibility is, as 
the head of this agency, to see that they are appropriately 
placed to get the kind of services that they need? 

MR. ALVARADO: Historically, Senator, we don't 
have the capability to administer any mental health type 
assistance. 

We do have a screening process that does ask that 
question. 

Generally, most veterans that enter into the 
veterans home have to pretty much walk in on their own. 
However, if something occurs while they're there, "we take care 
of them. We make every effort in the world, with our limited 
capacities, to take care of them. We will not abandon them. 

That's why we want to look at the possibility of 
engaging into a dialogue with the Veterans Administration in 
Long Beach. They want to tear down a golf course. And if they 
do that, they've asked us if we wanted the property, and if all 
things go well, I'd like to see that be the first veterans home 
that deals with that dementia situation. 

SENATOR HUGHES: All right. 

Have you had any occasion which the families of 
the veterans came to you and said that they were not pleased 
with the facility, the treatment, or the accommodation, or lack 
of accommodation, that these veterans were receiving at the 
home? If so, what did you do, and were there many complaints, 
very few, or none at all? 



37 

MR. ALVARADO: I haven't seen any — 

SENATOR HUGHES: On your watch. 

MR. ALVARADO: I haven't seen any, Senator. I 
have not experienced any complaints from families. 

On the other hand, it's probably just the 
contrary. We've had more families come to our home and 
compliment the quality of care that their relatives are 
receiving from the Barstow Home and Yountville. I'm sure it's 
going to be the same thing in Chula Vista. 

SENATOR HUGHES: Thank you. 

SENATOR LEWIS: Questions? 

SENATOR O'CONNELL: If I may, we've had a chance 
to talk before. 

I wanted to ask you about some recent information 
on the veterans homes. As you know, Senator Knight and I worked 
a couple of years with you in a different capacity in terms of 
development of the additional home. 

Could you maybe bring us up to speed, your plans 
for the future development of the subsequent homes, funding 
sources? I know you have been working with some potential 
funding from Washington, D.C. 

MR. ALVARADO: Senator, one of the problems that 
we have — certainly this happened before my watch, again — is, 
I spoke to Senator Knight about it, and the members the 
Lancaster community. 

The rules were changed, in essence, and I had the 
name of the law, the federal law. It's not important, but about 
a year-and-a-half ago, Congress took it upon themselves to 



38 

remove California from the Priority One List. So, that means 
that now, because we're not on the Priority One List, they're 
using an entirely different formula to suggest who is going to 
get funded for the next veterans home. 

So, what we've done with the support of the 
Legislature, and asking that we take advantage of the surplus 
funds that we have and start going into Lancaster, for example, 
and build the Lancaster Home with state surplus funds. It'll 
cost us about $32 million, and by the time we get to your 
district, I am confident that we will have worked out that 
Priority One List situation. 

I'm not confident that we can do it in a year, 
because they've already put us down so low. Because of the 
enormity of our state, all the other little states are taking 
advantage of this, because that's essentially what happened. 
The larger states with a number of veterans homes pretty much 
got moved away from the Priority One List. 

But we will continue to work with the VA to try 
to get us back up. And essentially what that's going to take, 
Senator, is either preferential legislation, or it's going to 
take an intense lobbying effort on our behalf. But I don't see 
that happening because it's just a drawn-out process. 

I see the vehicle there, particularly for 
Lancaster, to use state surplus funds to build that home and 
just move on. If we do that, it provides us with a better 
avenue of independence. We're not tied down to the VA. And I 
would prefer to see that, rather than going through the VA. 

SENATOR O'CONNELL: Could any of the recently 



39 

passed $50 million bond measure that, I think, Senator Dunn had, 
could any of that money be used for — 

MR. ALVARADO: I think it could be used. I'd 
like to use it. It would certainly provide us with a visible 
commitment to provide to the VA that we're serious about 
applying money, if not seed money. 

Like, Senator Knight has a bill, I believe, that 
would give us, I believe it's $12 million. And that, to me, 
what I see is a line of credit. We give it to the VA and show 
it to them that we're serious about this, and that would provide 
us with an opportunity to, perhaps, work with them, and move us 
away from — below the Priority One List. 

But yes, I think we could use that money. 

SENATOR O'CONNELL: What role would you play 
over the bond money that passed, that the voters approved? What 
role do you play as the Secretary? 

MR. ALVARADO: My role was to get the word out, 
and get the voters out. 

SENATOR O'CONNELL: Subsequent to the passage of 
the bond measure, do you determine the allocation of that bond 
money now? 

MR. ALVARADO: I think it's a collective effort, 
Senator. I won't do it by myself. There's going to be others 
that are going to be involved in this. But I want to do it in a 
collective — 

CHAIRMAN BURTON: Who? 

MR. ALVARADO: It's going to have to be the 
Governor's Office, the respective district — the respective 



40 

Senators, and the Department of Finance. 

SENATOR O'CONNELL: Thank you very much. 

CHAIRMAN BURTON: I have one question. 

What else are you going to do with these bonds if 
you don't use them for veterans homes. 

SENATOR KNIGHT: That's a good idea. I thought 
that's what they were for. 

CHAIRMAN BURTON: You said you'd like to do them. 
What else can you do with them? You can't buy fishing tackle. 

MR. ALVARADO: That's correct. 

CHAIRMAN BURTON: So, the answer to the question 
is, yeah, we can use these veteran bonds to do what the Senators 
are talking; right? 

MR. ALVARADO: That's correct. 

CHAIRMAN BURTON: That's not how you answered it. 

MR. ALVARADO: I understand that. Wrong answer. 

CHAIRMAN BURTON: Senator Knight. 

SENATOR KNIGHT: My $12 million was primarily for 
the state's portion of the construction of the home in 
Lancaster. 

My understanding also is that there is a 
possibility that we could go ahead and pay for the total 
construction and be reimbursed from the federal government at 
sometime later. Are you aware of that, or is that a fact or 
just a rumor? 

MR. ALVARADO: That's the understanding that I 
have, Senator. Sometimes the VA doesn't like for us to get 
ahead of themselves — ourselves. 



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I don't know how they would feel about going back 
and asking us — to pay us the money that they owe us. 

But if possible, I would love to use just state 
money for this. It's easier. It's a lot faster, and we have 
less strings tied to the VA. 

SENATOR KNIGHT: Another question is, it's been 
indicated there have been stacks and stacks of paperwork coming 
in opposing your confirmation. 

You indicated that you didn't know why or what 
the problem was. And you still maintain that you don't have any 
idea what kind of a problem generated all of the paperwork that 
has come in opposing your nomination? 

MR. ALVARADO: Well, Senator, I know that during 
the course of my tenure as the Deputy Director, management 
situations were changed. And I'm assuming that there are some 
individuals that didn't like our decisions, and now they're 
taking the opportunity to come towards me and oppose my 
confirmation. 

But that's the extent of what I can think of. I 
can't think of anything else, Senator, I really can't. 

SENATOR KNIGHT: There is an indication that you 
may have hired a medical officer at Barstow that had a 
probationary license? 

MR. ALVARADO: No, that's in Yountville. 

SENATOR KNIGHT: Was it Yountville? 

MR. ALVARADO: Yes, sir. 

SENATOR KNIGHT: Is there any reason that we 
would have to hire a probationary medical officer? 



42 

MR. ALVARADO: Well, he was hired a number of 
years ago. He was instructed -- because of a fatality that was 
committed while he was practicing, he was put on a probationary 
period for a particular period. And he was instructed to 
complete at least a four-year class, training, and going through 
a number of other classes that would require him to — that 
would allow him to come back and practice. 

He was interviewed by the staff at Yountville. 
He went through all the process, the medical staff, nursing 
staff. And he is very well liked by the veterans at Yountville. 
He has not had any problems. He's proved to be an outstanding 
interim Chief Medical Officer. 

But so far, I have not received any information 
that's negative in any way. The doctors supported him. 

CHAIRMAN BURTON: You're talking about Barstow; 
you're talking about alcoholism, and the best you can come up 
with is encourage them to join AA? 

MR. ALVARADO: In Barstow, yes, sir. We don't 
have the facilities. 

CHAIRMAN BURTON: What's the facility? Do you 
know what the facility takes? It takes a room. Takes a couple 
shrinks; takes a couple psych techs; takes meeting; takes group 
therapy; takes a room. 

Doesn't take — it's not brain surgery. It's kind 
of group therapy. It takes a room. Takes a room smaller than 
this or larger, depending on how many people you have with the 
problem. 

Doesn't take anything. Do it in a mess hall at 



43 

night. 

I mean, I imagine you have rooms there; right? 

MR. ALVARADO: That's correct. 

CHAIRMAN BURTON: So, I'm missing something. 

MR. ALVARADO: You're talking about bringing in 
additional staff? Is that what you're saying, Senator? 

CHAIRMAN BURTON: I'm talking about trying to 
deal with alcoholism and drug abuse among the veterans, so I 
guess yeah. You have some shrinks. You have some psych techs. 
You have people to facilitate the group dynamic, yeah. 

MR. ALVARADO: Senator, that's one of the 
problems we were having in Barstow big time, is recruitment and 
retention. We've not had the luxury of hiring additional staff 
to provide that kind of service, so we don't have — 

CHAIRMAN BURTON: Why is that? 

MR. ALVARADO: Senator, the previous 
administration took it upon themselves to run on a shoe-string 
budget. That's why we're having the problems that we're having 
right now, the over-time, the excessive over-time. 

CHAIRMAN BURTON: Have you asked for money in the 
budget for these kind of things? 

MR. ALVARADO: Yes, sir. Yes, we did. 

CHAIRMAN BURTON: For what? 

MR. ALVARADO: We asked for about $24 million to 
bring in additional nurses, about quality assurance teams, 
doctors, and registered nurses, to provide a wider scope of 
medical — 

CHAIRMAN BURTON: Why didn't you ask for it 



44 

directly to deal with drug abuse and alcoholism? 

MR. ALVARADO: Not in Bars tow. We didn't do that 
in Barstow. 

CHAIRMAN BURTON: Why? 

MR. ALVARADO: Well, sir, I haven't ~ that 
critical need hasn't been brought to my attention in Barstow. 

CHAIRMAN BURTON: Got no drunks in Barstow? 
Nobody there with drugs. 

MR. ALVARADO: I don't know. It's not a critical 
need. 

CHAIRMAN BURTON: Why are you going to tell them 
to go to AA? 

MR. ALVARADO: That's been the procedure. It's 
been the extended procedure. 

CHAIRMAN BURTON: Well, you don't tell them to go 
to AA if they're sober. You tell drunks to go to AA. 

So, if everybody there is sober, and never been a 
drunk or a druggie, in other words, there's no alcoholism. No 
drug dependency among the patient load in Barstow? 

MR. ALVARADO: I haven't seen that problem, 
Senator, I really haven't. Staff hasn't brought it to my 
attention. 

SENATOR LEWIS: I have a question. 

CHAIRMAN BURTON: Be my guest. 

SENATOR LEWIS: You mentioned that retention was 
a problem in Barstow? 

MR. ALVARADO: That's correct. 

SENATOR LEWIS: How is the employee morale at the 



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Barstow facility? 

MR. ALVARADO: It — it's been low, Senator, over 
the last four or five years, basically I guess in the last four 
years. The turnover has been relatively high, at least higher 
than I would want to accept. 

Even during the course of my tenure, I've seen a 
lot of turnover because we just can't compete with the other — 
other hospitals with respect to compensation. 

And in this budget that we submitted for 
consideration and approval, we've asked for the addition of the 
necessary money to provide recruitment and retention incentives 
for our nurses, RNs and LVNs . 

But it's been — the morale has been such that 
it's picking up, because I think they recognize that we're 
surely interested in their best interest in terms of providing 
them with incentives to stick around. 

SENATOR LEWIS: There have been a number of 
employees in Barstow that have been placed on administrative 
leave. 

MR. ALVARADO: Uh-huh. 

SENATOR LEWIS: They have alleged that sometimes 
it's because they've engaged in whistle-blower activity. 

Have you heard that? 

MR. ALVARADO: On the administrative for 
whistle-blowing? 

SENATOR LEWIS: Yes, for whistle-blowing. 

MR. ALVARADO: I don't think it's been for 
whistle-blowing. I really don't. 



46 

SENATOR LEWIS: How many -- 

MR. ALVARADO: I do believe some of these 
employees that were put on administrative leave are personnel 
actions . 

CHAIRMAN BURTON: Like what? 

MR. ALVARADO: Sir, I don't know if I'm allowed 
to comment. It's going through the process right now. I know 
some of those individuals are here today. 

CHAIRMAN BURTON: We aren't asking names. 
There's an allegation that they were getting 
screwed over for whistle-blowing. The response to that is — 

MR. ALVARADO: No. I haven't heard of any 
whistle-blowing reprimands at all, Senator. I have not. 

SENATOR LEWIS: I think I see some of them in the 
audience. I'll just wait until they come up. 

CHAIRMAN BURTON: Who was the consultant that was 
hired to do the study you talked about? 

MR. ALVARADO: Len Blair and Associates. 

Are you talk about going into the Barstow. 

CHAIRMAN BURTON: Right. 

MR. ALVARADO: Len Blair and Associates. 

CHAIRMAN BURTON: Was it an independent study, or 
was it hired by the people that he was studying? 

MR. ALVARADO: No, the Len Blair and Associates 
was hired by the Department. 

CHAIRMAN BURTON: So, he was hired by the 
department that he was studying? 

MR. ALVARADO: No, they weren't — I'm not quite 



47 

sure what you're talking about, Senator. 

CHAIRMAN BURTON: He's taking a look at Barstow; 
right? 

MR. ALVARADO: Len Blair and Associates came in 
was brought in, Senator, to review our practices, 
specifically to help us get past the survey, this past survey 
that we under went. 

CHAIRMAN BURTON: That was the one that you 
passed. 

MR. ALVARADO: That's correct; yes, sir. 

CHAIRMAN BURTON: So, there were how many surveys 
that we didn't pass? 

MR. ALVARADO: Two previous to that. 

CHAIRMAN BURTON: There were two previous surveys 
this thick that we didn't pass, and then we had one survey this 
thick that passed us? 

MR. ALVARADO: We went from 122 deficiencies to 
8, and then one. The first one was originally 122 deficiencies 
last year. 

CHAIRMAN BURTON: Did the surveys talk about the 
deficiencies, and then say these were corrected? Or did he just 
say the deficiency is, like, whatever? 

MR. ALVARADO: What they do, the DHS did the 
inspection. And when the deficiencies were brought to our 
attention, I took immediate action to address the issue relative 
to those who were responsible for it. 

CHAIRMAN BURTON: Tell me about the Cal-Vet Life 
and Disability Insurance Plan. Do you know whether or not any 



48 

vets or survivors lost homes as a result of either the increased 
premiums or decreased benefits from the program? 

MR. ALVARADO: None, sir. None. 

CHAIRMAN BURTON: None whatsoever? 

MR. ALVARADO: None, and they won't lose their 
homes during my watch. 

CHAIRMAN BURTON: Why not, if the policy says you 
have to? Are you going to reach in your own pocket? 

MR. ALVARADO: We tried to work with veterans. 
That's historically been the plan. We don't — we're not in the 
business of -- 

CHAIRMAN BURTON: It is a private insurance 
company. 

MR. ALVARADO: That's correct. 

CHAIRMAN BURTON: So, how are you going to tell 
them not to do it? 

MR. ALVARADO: They work for us, Senator. They 
work for the Department of Veterans Affairs. 

CHAIRMAN BURTON: You pay the premiums, but 
they're the insurance company. They're making the profits and 
taking the risk; right? 

MR. ALVARADO: Right, but there have been no 
foreclosures at all, not one, not once. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Along that line, may I follow up 
on that same question? 

CHAIRMAN BURTON: Yes, you may. 

SENATOR HUGHES: This is the disability insurance 



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coverage previously paid by the disabled veterans for mortgage, 
taxes, and insurance as long as they are disabled; is that 
correct? 

MR. ALVARADO: That's correct. 

SENATOR HUGHES: But under the Department's 
current plan, the coverage stops after two years, regardless of 
the continuing disability of the veterans or whether the veteran 
can even return to work. 

How many potential veterans may lose their home 
because of this problem, because of your Department's policy? 
That's the way, I think, that Senator Burton was going, and 
that's what I don't have clarified. Because, you said they 
won't lose it. 

If you have a policy that says, after two years, 
why wouldn't they lose it? What do you have to counter-act the 
loss of that property? 

MR. ALVARADO: Well, what I meant, Senator, was 
if there is a veteran who has a disabled — is in a disabled 
situation, we will work with that person to extend the 
protection until he or she — 

CHAIRMAN BURTON: How do you do that? 

MR. ALVARADO: We have that option, Senator. 

CHAIRMAN BURTON: How do you have that option? 
You contract with an insurance company to provide coverage, 
which is a contract, and they're in business to make money. The 
contract says that they will get coverage; you've got two years' 
coverage. 

Now, how does that coverage get extended? 



50 

MR. ALVARADO: Well, Senator, I have handled some 
of those personally. When I get a letter from an individual 
concerned about their two-year limitation is coming forward, 
I've always made it a point to suggest, strongly suggest to our 
Chief of Farm and Home to find a solution, to work with this 
individual so that he's not displaced from his home. 

CHAIRMAN BURTON: How do you work with them? A 
guy's disabled and has no income. 

MR. ALVARADO: No, not with the individual. I'm 
talking about trying to extend. For example, trying to extend 
the -- 

SENATOR HUGHES: But the disability has not been 
corrected, and the person's still going to be disabled. So, how 
do you rectify that? I mean, how do you keep it from — you're 
saying you stop it? How do you stop it? 

This disabled, suppose the person's lost a limb 
and has not adjusted to using an artificial limb, and they have 
limitations about what they can do physically. 

How do you stop it? What do you do? I don't 
understand what you're saying. 

MR. ALVARADO: Well, Senator, I've got to tell 
you that this decision was made before I came on board. It was 
made in 1996, I believe it was. 

SENATOR HUGHES: Yes, but you said you personally 
handle it. What do you do to handle it? 

MR. ALVARADO: If someone comes — if I get a 
letter from an individual over the last year that I've been 
there, if I get a letter from an individual saying, "I'm leaving 



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my two-year coverage, and I'm afraid I'm going to be displaced." 

SENATOR HUGHES: And you say, don't worry, I'll 
take care of it? 

MR. ALVARADO: I'd like to do that. I'd like to 
say don't worry. 

SENATOR HUGHES: That's what you just said. 

MR. ALVARADO: That's correct. 

SENATOR HUGHES: That you told that to 
Mr. Burton — 

MR. ALVARADO: That's correct. 

SENATOR HUGHES: — that you said you personally 
get involved, and they don't have to worry. 

SENATOR HUGHES: You say you take care of it, 
and you rectify the situation? 

MR. ALVARADO: As temporary — as much as I can, 
Senator, yes. 

SENATOR HUGHES: As temporary? 

MR. ALVARADO: Yes, ma'am. 

SENATOR HUGHES: As temporary. 

So, you won't get put out on the street until 
next month — 

MR. ALVARADO: No, ma'am. 

SENATOR HUGHES: — instead of tomorrow. 

And that's what you mean, I guess? 

MR. ALVARADO: No, no, no. 

SENATOR HUGHES: I don't know; it's very fuzzy to 



me. 



I don't understand. I really don't understand. 



52 

CHAIRMAN BURTON: I just want to follow up on 
this, and then we can hear from witnesses in support and 
opposition, if there is any. 

The second tiered veterans, who would be the ones 
that weren't grandfathered in, they have mortgage payments of 
principle and interest for five years, three years, or one year, 
depending on the veteran's current health status. Which kind of 
leaves the widow somewhere. 

Whereas, before, I guess it was like the 
mortgage-life insurance somebody else has. 

MR. ALVARADO: Right. 

CHAIRMAN BURTON: Under the disability insurance, 
they get principle, interest, and taxes for 24 months, or 12 
months if it's psychiatric disability. And there's a 90-day 
waiting period, which is helpful. And, in any case, only until 
the age of 62. 

I mean, I think I much rather would have been the 
one selling the insurance than the one buying the insurance. 

What are you doing on the issue of homeless vets? 

MR. ALVARADO: Senator, we've applied — we're 
working with the WIA. And we submitted an application to them 
for $15 million to be able to provide funding for homeless 
veterans through the different community-based organizations 
that are working with that targeted group. 

Right now, as a department, we don't have that 
capability to do that. We just work to enhance and to help in 
the stand-downs. 

CHAIRMAN BURTON: To serve them how? 



53 

MR. ALVARADO: Well, we work with the stand-down 
folks do the stand-downs throughout the state. But we don't 
have the capabilities to serve — 

CHAIRMAN BURTON: You were asking for $15 million 
to contract with community-based organizations to serve homeless 
vets. 

Have you gotten any commitment on those funds? 

MR. ALVARADO: No, sir. No, sir. We just 
started that process about a month-and-a-half ago. 

CHAIRMAN BURTON: What did you do before then for 
homeless vets? 

MR. ALVARADO: We were putting together — well, 
like I said, our role historically in the Department has been to 
work with the stand-down efforts throughout the state. 

CHAIRMAN BURTON: Historically there haven't been 
a lot of homeless, either, historically. 

MR. ALVARADO: Homeless veterans? 

CHAIRMAN BURTON: Historically. I mean, it's 
been homelessness, unfortunately, has been a recent, I think, 
phenomena over ten years, if that's the historic we're talking 
about . 

How did you come up with the 15 million? What 
would you do with it? 

In other words, you're going to get 15 million to 
contract with somebody else? 

MR. ALVARADO: Somebody that's doing it already. 

CHAIRMAN BURTON: What are they going to do? 
WIA is for job training and other stuff, not to provide shelter; 



54 

right? 

MR. ALVARADO: Right. I do believe that's 
correct . 

What we're going to do, sir, is, we have a number 
of veterans organizations, or veterans community-based 
organizations throughout the state that have currently proven 
themselves in providing the kind of services that we can't 
provide . 

So, with this $15 million — 

CHAIRMAN BURTON: Why can't you provide it? 

MR. ALVARADO: Because we don't have the money, 
nor do we have the capability. 

CHAIRMAN BURTON: Have you asked for it? 

MR. ALVARADO: No, sir. 

CHAIRMAN BURTON: Why not? 

MR. ALVARADO: I don't know, sir. I don't know. 

CHAIRMAN BURTON: Honest answer. 

SENATOR KNIGHT: Mr. Chairman, one more 
question. 

That bill you were looking for was HR 2116. Is 

MR. ALVARADO: I believe that's it. 

SENATOR KNIGHT: And that bill became effective 
11/30/99. 

MR. ALVARADO: Wasn't it — wasn't it going 
through the process in '98? I believe it was going through the 
process in '98. 

SENATOR KNIGHT: It was instituted in June of '99 



that it? 



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and became law in November of '99. So, it would appear as 
though we should have been aware of that and kept up with it. 

MR. ALVARADO: We should have. I certainly was 
not aware of it, Senator. 

CHAIRMAN BURTON: Witnesses in support. 

MR. FITZKE: Good afternoon, Mr. Chairman, 
Committee. My name is John Fitzke. I am the Vice Chairman of 
the State Veterans Board, representing the Chairman, George 
Sinopoli . 

The State Veterans Board passed a resolution 
signed by all of its members in support of our Secretary, 
Mr. Alvarado, and he does have our full support. 

I can honestly tell this Committee that in the 
ten months that most of us have been in operation on the Board, 
had the opportunity to work with the current Secretary, 
Mr. Alvarado, his fullest attention and greatest desire has been 
to do what is right for the fellow veterans in the State of 
California. 

I guess to put it simple, you don't gain 300 
pounds in five years or four years and try to lose it 
overnight. 

We have been very frustrated on the Board in 
working with a Secretary, in that we have inherited a lot of 
previous decisions from a prior administration. And 
unfortunately, you just don't correct them overnight. 

But Mr. Alvarado does have the full support of 
the Veterans Board, and I thank you very much for your time. 

CHAIRMAN BURTON: Thank you, sir. 



56 

MR. JACKSON: Thank you, Senator. Good 
afternoon, ladies and gentlemen. 

My name is Bill Jackson. I'm a desert rat. I 
came to Barstow in 1951 with the United States Army to open 
Irwin. I loved it, and I stayed there. 

CHAIRMAN BURTON: I hope you bought a lot of 
property. It's growing. 

MR. JACKSON: The past 25 years, I've been deeply 
involved in veterans affairs because of my affiliation with the 
American Legion, because of my experience growing up with older 
people . 

I'm absolutely amazed, and I enlisted in the 
fight to create veterans facilities in Southern California 18 
years ago, never thinking that I would be a resident someday. 
But I've been a resident of Barstow for the past two years. 
I've been active. 

And I'm awfully glad that I have had the support 
and friendship of not just Tomas Alvarado, but the whole staff. 
In appointing this gentleman, in endorsing this gentleman, you 
get the whole staff. 

We believe that if we've given enough time, by 
golly, we can solve these problems. Most of the problems have 
been put upon us with the hound dogs nipping at our heels. They 
were created by others, and we resent it. 

We have been in constant touch with the 
administration, with the staff. They accept our reason and our 
ability, but we have certain people who have never even been to 
the home, don't have the vaguest idea what's going on, creating 



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situations that we're doggone sick and tired of. 

Mr. Chairman, I proudly request an aye vote of 
the Committee for Tom Alvarado. 

Thank you. 

CHAIRMAN BURTON: Thank you, sir. 

MR. HARPER: Good afternoon, Mr. Chairman and 
Members of the Committee. My name is Don Harper, and I am 
President of the California Association of Veterans Service 
Agencies. 

We are a community-based organizational system in 
California, providing 19 programs for veterans throughout the 
State of California in 20 different geographical areas, 
representing veterans, mainly veterans that have barriers to 
employment. And we do a lot of work with the homeless veterans 
and disabled veterans. 

I am here on behalf of the Association to support 
the confirmation of Secretary Alvarado. 

A couple comments, if I may. As many of you may 
know or may not know, the Secretary at one time worked for a 
nonprofit community-based organization doing services with 
veterans that needed special training needs and provided 
homeless services as well. So, he has an understanding of the 
kind of group of veterans that we serve in our system here. 

He has also been involved, and his staff has been 
involved directly with the stand-down program in California, 
focusing on homeless veterans. 

I founded the Sacramento stand-down back in 1992, 
and I recall then not only he, but did members of that 



58 

department come out and do direct services for veterans who were 
homeless for a long period of time. 

So, I think now, they have a vision on the table 
to be pro-actively and try to do so something, working with 
homeless veterans, as the Senator indicated a few minutes ago. 

We think, as an Association, he understands the 
special needs and special programs that are needed for this 
population. They're either homeless or at risk of being 
homeless. And he recently submitted a Gap Report to the 
Governor that talked about gaps in services and solutions and 
programs that would get to the heart of the issue. 

Like you indicated, Senator, homelessness is a 
relatively short phenomenon in the past ten years. And with 
your good work and other people working on this issue, we think 
we can make a dent in providing hard-core, decent, significant 
services for our homeless veterans in California. 

I think his Gap Report reflects solutions and 
programs, I think, that we're going to be a part of to make sure 
every veteran has a chance to better himself in California. 

My last comment would be — is that we feel that 
the Secretary should look at all the gaps, not just gaps for 
homeless veterans, but all the gaps for veterans in California. 
And by you giving him an aye vote on the confirmation, we feel 
many gaps will be helped, and veterans will be better served in 
California. 

CHAIRMAN BURTON: I thank you, but I'm troubled 
about the fact that the only thing that the Secretary did 
concerning homeless veterans was to ask for some TANF money. He 



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didn't submit money for the Veterans budget, and we know how 
supportive of veterans the Governor is, being one. That there 
wasn't a request in the budget for money for homeless veterans, 
but to take it out of TANF, which then takes it out of a variety 
of other programs that were really geared for those who are 
welfare recipients coming off welfare and not necessarily the 
homeless veterans. So, I'd be surprised, maybe, if even they 
qualified. 

But I was kind of distressed to find out there 
wasn't a request for a big appropriation in the Department's 
budget for that. But that's just my own opinion. 

MR. HARPER: It's been our Association view for 
the last two or three years that the Secretary, the new 
Secretary and the past secretaries need to take real hard look 
and be pro-active — a pro-active look, and putting more money 
in the budget for homeless veterans. We concur a thousand 
percent. 

CHAIRMAN BURTON: Other witnesses? Sir. 

MR. LATTMAN: Senator Burton and Members, my name 
is Larry Lattman. I'm Chairman of Allied Council at the 
Veterans Home in Yountville. 

Myself and my Board, the Allied Council, are 
elected officials like yourselves. And I'll tell you, I'll 
never run for another office again as long as I live. I don't 
know how you guys do it. 

The California Veterans Home in Yountville is the 
largest veterans home in the world. It's the third oldest home 
in the United States. Tomorrow, I'll be giving an interview to 



60 

CBS, to Dan Rather News, about our home. It'll be broadcast 
nationwide the 26th of this month on the Dan Rather, CBS News. 

There are 1126 of us living in the home. The 
average age in our home is 78 years old, 78; 30 percent of our 
membership, our vets, are in wheelchairs, they're on walkers, or 
scooters. 

We have to tell the children tomorrow, we're 
going to a middle school to tell children about freedom and 
democracy. I'll be taking with me to that school a World War I 
veteran. We have four World War I veterans living in the home, 
and all the way down to Desert Storm, and Korea, World War II. 

Now, we all know what happened in World War II 
and what we owe the veterans in World War II. Hell, you 
wouldn't be sitting here if it wasn't for the veterans of World 
War II. 

Now, since this administration has come in, this 
new administration with our new Governor, Gray Davis, a veteran, 
a decorated veteran, and he brought forward the name of Tomas 
Alvarado to become Secretary of Veterans Affairs. 

The first thing I did, I looked up his military 
record. This man has two silver — was wounded twice. Has all 
the decorations in the world. He knows the pain. He knows the 
anguish that we feel. 

And every time — I don't know the man that 
well. I met him on three occasions, but everytime that I met 
him, he gave us hope. He gave us time. He solved problems for 
us . 

And if he did one thing alone that deserves his 



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confirmation, he sent to the home a lady Commander from the Navy 
to be our new administrator. We have been so rudderless the 
last three or four years with interim administrators. And this 
young woman has brought new life into that home like you've 
never seen before. It's absolutely amazing what she has done in 
the short period of time. If this test alone would bring him 
confirmation, then he would pass A. 

I do know the third man in the veteran community, 
which is Mike Manilow. With Mike Manilow on Secretary 
Alvarado's team, we cannot lose. 

We are the largest home in the world. We know 
this gentleman intimately. We know what he's done for us . We 
have the Blue Ribbon Commission. We have the very generous 
budget that you people have given us. We thank you for it. 

We also have the lynch pin, Proposition 16. That 
will be the keystone to build that bridge into the new 
millenium of Veterans Affairs coming up, the health issue. This 
is the first gentleman that's tackling the dementia and 
Alzheimer's disease. 

I worked for two years in outreach. I heard 
these hideous stories of families breaking up because of 
dementia. It was the first time I heard from an individual in 
the Secretary's office that again tackled dementia and 
Alzheimer's disease. This is wonderful news for us. 

As far as stand-downs, we had a stand-down, an 
East Bay stand-down. We even brought Miss America down. We had 
her flown, and we had doctors there. We had dentists there. We 
reach out to these people everytime we get a chance. Vets take 



62 

care of vets. 

And I will also tell you this, that a hundred 
years ago almost to this day, the State of California bought 
from the Grand Army of the Republic the home in Yountville for 
20 dollars. That was better than the Louisiana Purchase, 
Senator Burton. 

CHAIRMAN BURTON: Better than Alaska. 

MR. LATTMAN: Yeah, for $20. And it's a hundred 
years today, almost to today, that we got into the veteran that 
the people of California, by their divine wisdom, compassion, 
and patriotism are looking after the veterans of this state. 

And the way to continue to do so, I strongly 
urge you to confirm this Marine. And I'm an Army man, I'm 
telling you. And I have to tell you to confirm a Marine, and 
I'm an Army man, but I'm telling you, this man is our answer to 
our problems in the future. 

Thank you very much. 

CHAIRMAN BURTON: Next. 

MR. BROWN: Mr. Chairman and Members, my name is 
Judge Brown. I'm representing the Veterans of Foreign Wars 
today. Our Commander is out of town. He asked me to come up 
and pass on to you that the Veterans of Foreign Wars, the 
110,000 member strong in the State of California, endorsed Tom 
last June at our Buena Park convention. 

There was some questions of whether we did or did 
not ask at the November council administration, which is a small 
thing we have twice a year. That was done in November in 
Modesto at our state meeting. We again unanimously endorsed him 



63 

for his appointment at that time. 

So, with that, and all the other testimony here, 
the Veterans of Foreign Wars is in full support of not only his 
nomination, but his appointment. 

Thank you. 

CHAIRMAN BURTON: Thank you, sir. 

MR. PEREZ: Senator Burton I'm Jose Perez. I'm 
the President of the Sacramento Hispanic Chamber of Commerce. 

We have known Mr. Alvarado now for about twelve 
months. And I've got to tell you that since our very first 
introduction, there's no question in our mind that he is a 
champion of veterans. 

He has talked about issues in the homes. He's 
talked about the challenges that are before him. And we are 
convinced that he is someone that clearly cares about the 
welfare of veterans of California. 

On top of that, he also has done something that 
we wish more appointees, quite frankly, do, and that is to open 
and invite small business owners to look at procurement 
opportunities with the State of California, not just in his 
agency, but encouraging small business owners to look at small 
businesses. And we think that's a really important thing, 
character that's admired. 

We support his confirmation and urge an aye vote. 

CHAIRMAN BURTON: Thank you, sir. 

MR. McCABE: Mr. Chairman, Members of the 
Committee, my name is Lawrence McCabe. I've been before you 
before for a different director. 



64 

I am here today to represent Cafe de California, 
a benevolent association of state employees. 

We urge you to nominate and approve the 
endorsement for this man. 

I know Mr. Alvarado personally. I find him to be 
a man of high character, and a man who represents the community 
well in all sense of diversity. 

Again, we urge you to vote yes for him. 

CHAIRMAN BURTON: Now, what I would like to do if 
there are other witnesses in support, give your name, your 
organization, if you're in some support. 

We want to give the opposition a chance, then 
Mr. Alvarado a chance to respond to the opposition. 

So, anyone who has prepared statements, we'll put 
them in the record. Otherwise, name, organization and 
support. 

Sir. 

MR. GARCIA: Mr. Chairman, honorable Members of 
the Committee, my name is Gaspar Garcia. I'm the Commander of 
the American GI Forum in Sacramento. 

I am here in support of Mr. Tomas Alvarado. 
Mr. Tomas Alvarado was appointed by Governor Davis. And since . 
he was appointed, there's been a lot of riff-raff saying things 
about him. 

But I know his programs and his efforts on behalf 
of veterans throughout California have been unequaled by anybody 
serving in that position thus far. 

I urge you that you listen to the veterans of 



65 

California and support the confirmation of Tomas Alvarado as 
Secretary of the California Department of Veterans Affairs. 

Thank you very much. 

CHAIRMAN BURTON: Thank you. 

MR. SANCHEZ: Rafael Sanchez. I'm on the Board 
of Directors of the United States Hispanic Chamber of Commerce. 

We urge strongly a yes vote on his confirmation. 
Thank you. 

DR. MARTEL: Dr. Joseph Martel from the 
California Latino Medical Association. 

We strongly support the confirmation of Tomas 
Alvarado as the compassionate and wounded previous veteran. 

Thank you. 

MR. BURNETT: Hello. My name is Ted Burnett. 
I'm the labor representative for California State Employees 
Association. And I'm the rep for Barstow Veterans Home. 

I'd just like to take 30 seconds just to tell you 
what bad a shape it was in when I got there nine months ago. 

The home had run off the other two previous 
reps. When they hired me, they told me that Barstow — I would 
spend 80 percent of my time, even though I represent other 
prisons, EDD, Caltrans, and California Highway Patrol up the 
desert area. 

I didn't know it was that bad. It was bad. 
There was rampant use of alcohol on the premises. People coming 
in late. They didn't call in. Disciplinary actions. 
Favoritism by the administration. A myriad of problems that 
existed. 



66 

We came in. We set down with Mr. Alvarado and 
the administration and said that we need to get together and 
form a partnership and a marriage to try to clean this place 
up. He said whatever we need to do to work together, we could 
do. 

We formed a labor-management committee. All the 
disciplinary actions that occurred there, we sat down and we 
discussed them before they were ruled upon. We came in and had 
a partnership to improve morale with the workers. And on my 
part with the Union, I took a lot of heat from my organization 
for entering into a partnership with management, but I felt that 
that was the only way that we could give the taxpayers and the 
veterans the most possible — the best service that we could 
give them. 

And I can safely say that in nine months, we have 
improved the morale of the home. They have policies and 
procedures that are now followed. 

CHAIRMAN BURTON: You're in support? 

MR. BURNETT: I'm in support. 

But I'll tell you folks, I'm telling the truth. 
I came in to tell the truth, not to do anything but just tell 
you. 

CHAIRMAN BURTON: I understand that. 

MR. BURNETT: The home was in despair. I came 
this close to turn around and tell them that I quit, because I 
could have got a job doing something else. 

So, I stayed, and I can safely say that in the 
nine months that Tomas and his staff have been there, we've 



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improved morale so much that when the Chula Vista Home opens, we 
will also be there to present the new workers with a form of 
labor-management to make sure that that type of thing doesn't 
happen to it, what happened with the Barstow Home. 

So, I'm in support. 

CHAIRMAN BURTON: Now again, name, organization. 
We have a lot of witnesses that are here. We have a lot of 
witnesses against, and then we have to allow Mr. Alvarado a 
chance to respond. So, we've got a time problem of immense 
proportions, not just with the hearing, but with the whole 
process. 

MS. GOODMAN: Thank you, Mr. Chairman. My name 
is Virginia Goodman. I represent the California State Employees 
Association, part of an affiliation of SEIU. 

I'm the President of the local district area that 
Mr. Alvarado is covering in that district. 

I am in support of Mr. Alvarado 's appointment. 
I'm also in support of our labor-management representative that 
just left us, Mr. Ted Burnett, because he worked very hard. 

CHAIRMAN BURTON: Is he up for confirmation? 

MS. GOODMAN: You need to put him up for some 
sort of confirmation. He has worked very diligently with 
Mr. Alvarado. 

Mr. Alvarado has shown quite a support in making 
things turn and change in the area of management. I think that 
a lot of the disgruntled paperwork that you talked about, 
perhaps Mr. Knight had talked about stacks of paperwork 
regarding some complaints. 



68 

CHAIRMAN BURTON: We will be hearing from them, 
okay? And I don't need somebody to tell us bad things about 
somebody. 

MS. GOODMAN: I have nothing bad to say about 
anybody. 

What I'd like to say is that I'd like to 
encourage, as we have done over there at the veterans home, that 
the employees utilize the services of the California State 
Employees Association representation team, so that if there are 
any grievances, there are avenues. 

I think that we're going to see a lot of good, 
positive things happening. 

Thank you. 

MS. WILSON: Greetings. My name is Valerie 
Wilson, and I am from Barstow, California. 

I've employed at the Barstow Veterans Home since 
day one. I am what you call an original employee there. I have 
helped everyone there. I am representing CSEA. I am the Senior 
Steward at Barstow. I am the first steward at Barstow. 
Anything that you would like to know about Barstow, I could tell 
you. 

I'm here in support of the confirmation of 
Mr. Tomas Alvarado. I am here to let you know that this 
gentleman has come in there. He has sat down with the veterans. 
His concern is the veterans. Also, he has told each and every 
staff member, take your shoes off; put their shoes on and see 
how they feel. This is their home. 

You know what, Senator? Continuity is what we 



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need. I've had a great loss. I lost my husband about six 
months ago to an aneurysm. He was in the Navy. I've lost my 
father. He was Air Force and Army. My sister. My two sons. 

Sir, we need continuity at Barstow. Tomas 
Alvarado has put men there of high caliber, men that would 
listen to us, that would take the time. 

Of course, we're going to have some employees out 
there that are activated and angry because of the corrections 
that are being implemented there. 

But we need corrections to pass. We don't want 
to close. 

I'm a widow now, sir, and I'm just asking you to 
keep Mr. Alvarado in place. We need continuity. 

We have changed heads and changed heads . We need 
the continuity. 

Thank you, everyone, for listening to me. 

CHAIRMAN BURTON: Thank you, ma'am. 

MS. BARAJAS: Good afternoon. My name is 
Griselda Barajas. I'm a member of the California Hispanic 
Chamber of Commerce. 

We're here in support of Tomas Alvarado 's 
confirmation. 

CHAIRMAN BURTON: Thank you, ma'am. 

MR. REECE: Good afternoon. I'm John Reece, 
District 13 Commander for AmVets, and I'm here representing the 
State Commander for AmVets. 

We strongly support Tomas Alvarado 's 
confirmation, and recommend the Committee do that. 



70 

Thank you. 

CHAIRMAN BURTON: Thank you. 

MS. REYES: Hello, Senator Burton, Members of the 
Committee. My name is Sylvia Reyes. I'm the current Chair of 
the Sacramento Hispanic Chamber of Commerce, Latina Network. 
And I also have 26 years' experience in health care. 

I'm here today to support Tomas Alvarado. We have 
had many, many lengthy conversations since his appointment. I 
do want to reflect on his personal commitment, integrity, and 
the whole strategic effort that he has taken over this past 
year. 

Please support him in this endeavor. 

MR. LOPEZ: Hello, Senator Burton. My name is 
Louis Lopez. I am a private business owner here in town, 
Printwise. I'm also a member of the Hispanic Chamber. 

I'm also Vice President of the Mexican-American 
Vietnam Memorial. I do not speak for that committee, but I do 
speak for myself personally. 

I've known Tomas, and I'll tell you, the man 
speaks to the veterans and wishes the veterans all that we can 
get, all that we need. And we need your help to keep him here. 
And I honor my support to Mr. Alvarado. 

Thank you. 

MR. OROSCO: Senator Burton, Committee, I'm 
representing the California League of United Latin American 
Citizens, and we strongly urge you to support Mr. Tomas Alvarado 
as we do. 

Thank you. 



71 

My name is Michael Orosco, O-r-o-s-c-o. 

MR. RAMIREZ: Sir, my name is Frank Ramirez. I 
come representing David Rodriguez, the State Commander of the 
American GI Forum. He asked that I come and testify and provide 
support for Mr. Alvarado. He'd be here today except his mother 
passed away Sunday, so I come representing Mr. Rodriguez. 

Thank you. 

MR. LEIVA: My name is Mauricio Leiva. I'm with 
the San Joaquin Valley Latino Vote, and I'm here in support of 
Secretary Alvarado. 

I believe that he's very open to ideas and 
suggestions about issues affecting the veterans of California. 
We strongly urge your aye vote. 

Thank you. 

CHAIRMAN BURTON: Witnesses in opposition. 

MR. ORTEGA: Good afternoon, Members of the 
Senate Rules Committee, Senator Burton. 

My name is a Samuel S. Ortega. 

I think that Mr. Alvarado 's an outstanding 
veteran, but not an outstanding administrator. And I want to 
talk about that. 

As I indicated, my name is Samuel S. Ortega. I'm 
a resident of Sacramento. I'm a retired state employee, 30 
years of state service. I'm a life member of the Veterans of 
Foreign Wars, Post 85. I'm a Board Member of the Latino Senior 
Citizens in Action, and also a Board Member of the California 
Mexican-American Veterans Memorial, Incorporated. 

I want to thank you for the opportunity to speak. 



72 

I'm in opposition of Mr. Alvarado's confirmation. 
I'm opposed to the confirmation of Mr. Alvarado because he does 
not possess the personal integrity to lead the Department, and 
he does not have the ability to perform the day-to-day- 
responsibilities without controversy and without making 
administrative blunders. 

My comments will be in three areas: A, willful 
violation of the Government Code to intimidate state employees; 
B, overt and persistent retaliatory conduct against state 
employees; and C, sexual harassment conduct against female 
employees of the Department of Veterans Affairs. 

My professional background is that — my state 
service, that is — I was the Assistant Chief of the Appeals 
Division, State Personnel Board. For four years, I served in 
this capacity, and in this capacity I investigated hundreds of 
complaints regarding discrimination, sexual harassment, 
retaliation, and misconduct on the part of the state employees, 
including high level administrators. 

My personal background, now that I'm retired, is, 
I'm President and sole owner of APA and Associates. And in this 
capacity, I am retained by clients to represent them in hearings 
before the State Personnel Board or before an administrative law 
judge. 

The first part I want to talk about is the abuse 
of power and the willful violation of the Government Code 
Section so-and-so, and you'll see that later. 

This is in reference to actions taken against 
state employees at Barstow. As you have heard quite often over 



73 

the last 18 months, about 10 employees have been restricted to 
their home in violation of the Government Code section. The 
employees affected are listed in the Handout Number One in the 
back of the report that I gave you. If you look towards the 
back pages, I think it's the fourth page. There's — a list of 
all the employees that I'm speaking of are listed there. 

And the next handout — first, you'll note the 
number of employees and the number of days they've all been 
restricted to their homes. The results have been that most of 
them — a lot of them have resigned, or most of them have 
returned. 

The part I want to cover now is the section of 
the Government Code that they used to send these people home. 
Now, that's the Handout Number Two. You'll see in this handout, 
the bottom part, is the part of the Government Code which they 
used to send people home. 

If you look above that, it's related to 
disciplinary proceedings. So, these people are not being sent 
home because they need counseling, or some kind of corrective 
action. There is intent here to do something adverse to these 
individuals. 

The problem is, they never did. 

Now, when they received their letters under this 
section of the Government Code, they're told, you're being sent 
home pending an investigation. The fact is, no investigations 
were ever done. 

So, what's the bottom line? The bottom line is 
to really intimidate the employees, to harass them, to coerce 



74 

them into submission, or results are demotions/ resignation, and 
transfer. And as you can see by the list of employees, that's 
happened quite often. 

Now, where's the evidence that this is happening? 
We have two people that are going to testify a little bit later 
on. We have, for example, a Mr. Fernando Gandara letter, and 
it's Handout Number Five. Look at Handout Number Five. 

Mr. Gandara asked, after he returned to work, 
where is the investigation? And the answer was, there is none, 
basically, is what this response is. If you want information, 
go to your personnel folder. 

Well, he went to his personnel folder. There is 
no investigation. So, how is that Government Code being used? 
It's being used to basically intimidate people. 

The same thing happened with Denise Hall. There 
was no investigation. 

Then there is a matter of e-mail that was 
prepared by a Mr. Bob Gray. If you look at Handout Number Six, 
which is the next-to-the-last-page, this letter was sent from 
Bob Gray, the former administrator at Barstow. And he states in 
this correspondence that he was directed by Mr. Alvarado to 
place Dr. Alfonzo Navarro on restricted leave. So, it's not 
something that the administrator at Barstow wanted to do. It's 
something Mr. Alvarado wanted to do. 

Then Mr. Navarro eventually resigned, and he was 
home for 51 days at taxpayers' expense. 

CHAIRMAN BURTON: I have a question. 

The Code section says that the absence is not to 



75 

exceed 15 days. 

MR. ORTEGA: And they have consistently exceeded 
15 days. And that's the thing I want to bring to your 
attention. 

There are no provisions in the Government Code to 
exceed the 15 days. The Government Code is based on legislation 
that you folks have enacted. 

And that message is clear: 15 days is 15 days. 

Now, what happens to an individual when they 
receive this notice that they are no longer — they're sent 
home, and they're kept there in suspense. What happens to them? 

They lose their dignity. They lose their 
self-respect. Their suppression [sic] and career opportunities 
are basically tarnished. 

It's like this. If you take this credit card, 
and you bend it, and you bend it enough times, you can break it 
apart, but you can't the first shot. But you keep it up, you'll 
get the result you're looking for. 

As I indicated earlier, the Department has no 
discretion in exceeding the 15 days. 

In the letter that Mr. Gandara received in reply, 
they themselves say, you were sent home for 30 days. So, they 
are admitting that they exceeded the limit from the Government 
Code. 

And in regards to the union, it's unfortunate, 
but the union is not representing these employees the way it 
should be, although they testified in his behalf here. In fact, 
Wednesday and Thursday, there's a State Personnel Board hearing 



76 

in Barstow in which Mr. Alvarado's been subpoenaed to be there 
to testify, because he was involved in some retaliatory action, 
and the union representative, who was here testifying, does not 
want to be there to represent the employees. He'd rather be 
here, representing Mr. Alvarado. Now, can you figure that one 
out? 

CHAIRMAN BURTON: Not for us to do. 

MR. ORTEGA: I'm going to move along here. 

As far as retaliation, I can just summarize that 
real quick, Senator. 

On February the 9th, one week before a Personnel 
Board hearing in Barstow, Mr. Alvarado went to Barstow, and he 
singled out Mr. Gandara. Mr. Gandara is a warehouse worker. 
He's a low guy on the totem pole. He took him for a little 
walk, and he said — he read him the riot act. What's your 
problem with general wide policy, and so on and so on. 

The problem with that is, Mr. Gandara has got a 
hearing before the State Personnel Board on a charge of 
discrimination. And the law is clear. When you file as an 
employee a charge of discrimination, there is not supposed to be 
retaliation or harassment against you. 

Now, if the Director singles out an employee at 
that level, what else could it be? Because it wasn't to 
compliment him. 

Then you'll hear on retaliation, you'll hear from 
Denise Hall. Denise Hall is the Public Affairs person at the 
veterans home. A letter went to the Governor that had some 
controversial language in it. Mr. Alvarado thought that Denise 



"77 

wrote that letter, and he called her from Sacramento to Barstow 
and told her, why are you betraying the Department? Without 
giving her any chance whatsoever to explain anything, and just 
basically intimidated her. That was one day, January 25th, I 
believe. 

The next day, Mr. Manilow, who is the hospital 
administrator, gives Denise a letter saying, you're going home 
under this Government Code for 15 days. And not only 15 days. 
It was extended another 7 days. 

In the end, there was no investigation. They 
just told her to come back to work. And that's the extent of 
retaliation that I see in this case. 

I want to go to the last item, and that is some 
sexual harassment complaints against Mr. Alvarado. 

One thing we have to understand in sexual 
harassment is that State of California process allows for a 
formal complaint or informal complaint. A formal complaint is 
an investigation. There's a report. There may be a hearing, 
and the documents are public. 

However, the state process allows for an informal 
complaint. And most complaints are settled on an informal 
basis. 

Now, you have before you two letters from females 
on a confidential basis, because they're treating these things 
as informal. They allege sexual harassment. 

Mr. Alvarado says, it didn't happen. Somebody's 
lying. The ladies are lying or Mr. Alvarado' s lying. 

Now, you have those letters before you. I 



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believe that you have the authority to interview those ladies 
and determine for yourself whether they're telling the truth or 
not. I don't think that a confirmation is proper without 
getting to the facts and make a determine on the merits of the 
facts . 

I want to summarize. I know you're pressed for 
time, Senator Burton. I'll summarize by saying this. 

The three actions I talked about — the violation 
of the Government Code, retaliatory conduct, and sexual 
harassment -- any one of those charges, any other administrator 
in state service would be dismissed. And here we have an 
individual with three charges. 

And just because Mr. Alvarado is an appointee of 
the Governor doesn't make him immune to the state system and 
drop the protection that employees are entitled to. 

With that, I'd like to conclude my remarks. If 
there's questions, I ' d be more than glad to answer them, 
Senator . 

Thank you. 

CHAIRMAN BURTON: Thank you, sir. 

Next. 

MR. CANFIELD: Mr. Chairman, Members of the 
Committee, I am John Canfield. I've been a veterans' advocate 
here in the Capitol for over 25 years. 

I'm here today speaking for Bob Hailey. And I 
think, according to Bob, that this has been distributed. 

Basically, Mr. Chairman, our concern is the 
veterans. We are not concerned about who's heading the 



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Department. We are concerned about the treatment that the 
veterans get. 

Some of the questions that have been raised by 
the Committee are absolutely great questions. 

What happens when the two-year limitation runs 
out? I don't know. We are concerned about veterans losing 
their homes. 

Mr. Chairman, there are a lot of witnesses, so I 
will make this short. We just urge the Committee to listen to 
the witnesses, and try to determine, is the Department better 
off 11 months after Mr. Alvarado took office, or is the 
Department worse off? 

He certainly has had a difficult job, and I've 
been one of his severest critics. I promised him one time that 
if the Department or if he did something right, that I was proud 
of, I would publicly compliment him. 

So, when the Barstow Home passed inspection, I 
wrote a letter to the editor of the Sacramento Bee , 
complimenting the Department, the Governor, the Secretary, the 
staff, all the way through, because folks, Committee Members, we 
need more veterans homes. And any bad publicity we receive on 
the operation of the home is just going to hurt the veterans for 
its future homes. 

The Legislature has been great, both sides of the 
aisle. They've always approved veterans bills. The voters 
have voted for Cal-Vet bonds. And folks, we want to keep up 
that good record. 

So, Mr. Chairman, I ask you to listen to the 



80 

veterans. I must admit, I did not intend to testify today, but 
I 'm speaking. 

CHAIRMAN BURTON: Good to hear from you and see 
you, sir. 

MR. DEBBS: Mr. Chairman John Debbs, and I'm the 
Vice Chairman of the Cal-Vet Farm and Home Loan Program 
Investigative Committee. 

We're a nonprofit association of Cal-Vet contract 
holders who have come together for the specific purpose of 
addressing the injustices and the grievances that we've suffered 
under the Department of Veterans Affairs. 

I've prepared just a brief statement. I would 
like, if I could, to read it into the record. 

CHAIRMAN BURTON: I see, your statement. 

MR. DEBBS: It's very brief. 

CHAIRMAN BURTON: Okay. The addendums will be 
made part of the record. 

But even if you could summarize your statement, 
it would be helpful. We'll make it part of the record. So, 
just summarize. 

MR. DEBBS: This is regarding Tomas Alvarado's 
complicity or incompetence, false statement and malfeasance in 
office relative to the diversions of hundreds of millions of 
dollars in the 1943 Fund or the Cal-Vet Home Loan Bond and 
Program monies. 

Tomas Alvarado had a knowledge of and has acted 
with malfeasance in office, and has helped to conceal and made 
false statements regarding the fact that there have been massive 



81 

fraudulent diversions of hundreds of millions of dollars, 
perhaps billions, from the Cal-Vet federal tax-exempt bond sale 
generated monies. 

Tomas Alvarado was first made aware of these 
facts and diversion of funds in the fall of 1997 by myself when 
he was campaigning for Governor Davis. At that time, I gave 
Tomas Alvarado all the documentation, or most of the pertinent 
documentation . 

He indicated that it was too embarrassing for 
himself, being the former Deputy Director in charge of the 
Division of Farm and Home Loans, and for the Governor, who was 
at one time the State Controller. So therefore, the information 
would not be used. 

More recently, in March, on March 16th, 2000, Mr. 
Alvarado in a letter addressed to John Canfield, whom you just 
heard from, made a false statement to Mr. Canfield relative to 
the diversion of funds. He states that, "your group should rest 
comfortably with the knowledge that the Department's operations 
are sound and without any hint of improper activity." 

Nothing could be further from the truth. The 
documentation and financial data, the Department's own financial 
data, show that there's a massive, mathematical impossibility. 
That the $5.6 billion that they say that was raised from the 
sale of bonds to make 75,000 new loans for Cal-Vet contract 
holders, this could not possibly have been done based upon the 
Department's own numbers. 

Mr. Alvarado personally comes into play in this 
situation. He was Deputy Director from 1990 to 1994, and had 



82 

direct administrative responsibility over the Division of Farm 
and Home Loans. And during that period of time, about $1,375 
billion was -- in bond fund money was never used, we believe, to 
make a single Cal-Vet Farm and Home Loan. 

Roughly $7 billion of program monies from about 
1980 through 1996 was used — when I say program money, I'm 
talking about interest and principle monies as opposed to bond 
fund monies -- was used to help pay the bond cost on several 
billion dollars in bond debt that was never used to make a 
single Cal-Vet Farm and Home Loan. 

Lastly, it's important to point out that 
veterans, Cal-Vet contract holders, have been charged the 8 
percent interest rate to help pay the cost on these bond debts 
when we should have been paying a 3 or 4 percent interest rate 
to help pay the cost on these bond debts. 

We have tried to talk to Mr. Alvarado on a number 
of occasions regarding this, and it was to no avail. 

I would like for you pay attention to the last 
page in the attachment I gave you. It's from the certified 
public accountant firm of Mr. John Maxey, who is currently doing 
an audit of the financial records of the Department of Cal-Vet 
Farm and Home Loan program funds. And it is clear that massive 
amounts of money have been diverted. 

We would ask you, the Cal-Vet contract holders, 
the client group, would ask you to oppose Mr. Alvarado 's 
confirmation. 

The man is clearly incompetent. The man clearly 
has no idea of what has to be done on behalf of veterans. And 






83 

again/ we ask a no vote on his confirmation. 

Thank you. 

MS. HALL: Good afternoon, Senators. My name is 
Denise Hall. I am the Coordinator of Volunteer Services and the 
former Public Affairs Officer for the past four years at the 
Veterans Home in Barstow. I have an excellent work history and 
performance evaluations. 

On January 24th of 2000, Mr. Alvarado called me 
by telephone from Sacramento at my place of employment regarding 
a letter written and signed by Arthur Benton to Governor Davis 
complaining of the substandard care of veterans and the 
inefficient management and intimidation of employees. His tone 
of voice was angry. 

On January 26th of 2000, I was accused of writing 
that letter and told by interim administrator, Mike Manilow, 
that, "You can come clean and resign, or we'll do an adverse 
action and you'll be terminated." 

I was placed on two-weeks paid administrative 
leave pending an investigation. The leave was extended for an 
additional two weeks. 

On February 11th of 2000, Mr. Alvarado was 
contacted by a reporter, and he stated to her that I had been 
placed on paid administrative leave for actions that could hurt 
the reputation of the home. He made that allegation with full 
knowledge that he ordered me home under Government Code 
sanctions relating to disciplinary proceedings. 

On February 14th, I was called back to work and 
informed that my office was relocated to an isolated building 



84 

across campus. My duties were drastically reduced, and the 
public affairs functions were arbitrarily removed. And I was 
also told that there was no adverse action. 

Although I was called back to work, I have been 
unable to do so for last two-and-a-half months. 

The action taken by Mr. Alvarado to restrict me 
to my home and arbitrarily change the scope of my duties, the 
statements made by Mr. Alvarado during staff meetings that he 
will fire people on the spot if they don't like the rules and 
worry about the grievances later, "There's the God damned door," 
and bragging that combat veterans are preferred, are against the 
state's Civil Service system standards. 

There are other employees who wanted to come 
today but were too afraid to come forward and tell the truth for 
fear that Mr. Alvarado will make good on his promise to 
terminate. 

I understand that by speaking to you today, I 
have placed myself in further danger of retaliation. It is 
important for me to do the right thing today and tell the truth, 
not only for myself, but for many others who have experienced 
similar treatment, are experiencing it now, and who may become 
victims in the future. 

Senators, won't you please do the right thing 
today by not recommending the confirmation of Tomas Alvarado. 
Please, give us the civil and courteous workplace that state 
employees are guaranteed by law. 

Thank you. 

CHAIRMAN BURTON: Thank you very much, ma'am. 



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And no matter what happens, one of the things you don't have to 
fear is any retaliation by anybody. They will find out what 
retaliation really is. 

SENATOR HUGHES: Mr. Chairman, I'd just like to 
ask the witness, did he say "There's the God damn door" in 
writing, or did he say it to you in person? 

MS. HALL: At a staff meeting. 

SENATOR HUGHES: At a staff meeting before other 
individuals, he disrespected you — 

MS. HALL: Yes. 

SENATOR HUGHES: — as a person. Thank you very 
much. 

MS. HALL: Well, not to me. He didn't say that 
specifically to me. It was in a blanket statement. 

SENATOR HUGHES: To anybody that they felt the 
shoe fit, they could wear it. Thank you. 

MS. HALL: Yes. 

CHAIRMAN BURTON: Just one question. 

Yours was a 20-day suspension, although the law 
only allows 15? 

MS. HALL: It was for two weeks, and then, the 
day before the two weeks was up, I received by Federal Ex from 
Sacramento an extension of that. 

CHAIRMAN BURTON: I don't think the Code reads 

that way. 

Thank you. 

Sir. 

MR. MacCLANAHAN: Mr. Chairman, we traveled 



86 

together. We've only got one walker. 

[Laughter. ] 

CHAIRMAN BURTON: So much for the wonderful 
treatment of veterans. 

MR. MacCLANAHAN: My name is George MacClanahan. 
I am privileged to be a resident of the California Veterans Home 
at Yountville. I am beginning my fifth year there. 

In the last year-and-one-half of that stay, it's 
only been possible because of a life-saving operation that was 
performed on me at the Medical Research Facility at the 
University of California at San Diego. The procedure it was 
employed was considered to be somewhat experimental, and was not 
available at other medical facilities in the area. 

I have been told by qualified medical authorities 
that the saving of my life comes close to being a medical wonder 
of sorts. That operation was facilitated by and performed under 
the auspices and through the intervention of the medical staff 
and the Veterans Home at Yountville. 

I literally owe my life to the Home and to the 
professional staff that is employed there, who diagnosed my 
ailment, and had the knowledge of proper method and the 
facilities available for surgical intervention, together with 
their will to make it happen. Without them, I would have died. 
Because of them, I can look forward to an unknown number of 
additional years of productive life, which I intend to use 
working for the betterment of conditions affecting the lives of 
veterans . 

It is my determination to pass on to the members 



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of this fragile and rapidly disappearing brother and sisterhood 
the hope and inspiration that others have bestowed upon me. 
Nothing short of that intention could prompt me to come here and 
deliver the statement I am about to make. 

Veterans of all kinds and distinctions go to the 
veterans home to spend the last years of their lives. They go 
mostly because of ill health, but sometimes they go because they 
are lonesome, or afraid, or impoverished, or apprehensive, or 
troubled, or uncertain, or because they feel misplaced at the 
time in the outside world, and the values of that world are no 
longer their values. 

In many cases, they go because they want to be 
near those with whom they share a kinship. That is to say, 
other veterans . 

Except in rare instances, the home is not a 
rehabilitation facility intended to retrofit members for return 
life outside the home. 

It is instead a last refuge for them, a haven, 
and for when there is need for such services that has a hospital 
with a remarkably capable understanding and caring staff. 

And finally, it has a veterans cemetery where 
their comrades wait. 

But until their time for that transition comes, 
these men and women need recognition for the contributions they 
have made to society and to their country. They need the 
respect that is their due for the path they chose at a time when 
America's future was on the line. And beyond that, simply for 
the accumulated wisdom of their years. 



88 

They certainly do not need to be made to feel 
like the village idiot or a social pariah. At a time when 
Mr. Alvarado had first come on board as Deputy Secretary under 
James Ramos, John Schumucker, who sits beside me, and I met with 
him on the subject of the Post Fund. 

When Governor Davis appointed Mr. Ramos as 
Secretary of the Department of Veterans Affairs, I asked for a 
meeting with Ramos regarding the future of the fund. I was then 
Chairman of the Post Fund Budget Committee for the Allied 
Council . 

Mr. Ramos agreed to a meeting in Sacramento, and 
asked me to bring John Schumucker along. Mr. Schumucker was at 
the time the Chairman of the Allied Council. 

When we arrived for the meeting, Mr. Ramos was 
otherwise occupied and asked Mr. Schumucker and me to meet with 
Mr. Alvarado. 

After the conversation had touched on some other 
things, I brought up the matter of the Post Fund. The instant 
Mr. Alvarado understood that I was going to express an opinion 
and perhaps offer some advice about the fund, he interrupted me 
in midsentence say, "You don't even know what the hell you're 
talking about." 

He didn't bother waiting to hear what I had to 
say. His manner was insulting, and his comment was clearly 
designed to bully me into silence about a subject of which he 
knew nothing at all, and was not prepared to discuss. He simply 
took the standard company line. Any other action, such as 
listening while a Home member expressed his or her views would 



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have been beneath his dignity and totally out of character. 

I have no doubt that Mr. Alvarado had been 
briefed on my role as an activist in the effort to save what 
little remained of the Post Fund resulting from the predations 
of the administration in Sacramento that began during the 
economic recession of the early '90s and continued until the 
Legislature rescued the Fund last year. 

This angry, parental type of posturing has been a 
common defense that has been universally used whenever there is 
the least hint of dissention or activism on the part of Home 
members for as long as I have lived in the Home. 

During my residency at the Home, I have worked 
continuously at the Member Employment Office, except for about 
seven months when I was recovering from my operation. Member 
Employment, although not originally intended to be the exclusive 
function of the Post Fund, had gradually become totally 
dependent on the Fund due to the Fund's convenience as a source 
of nonappropriated capital which the administration could spend 
without legislative oversight. 

The Post Fund, now renamed Moral, Welfare and 
Recreation Fund, is best described as a public endowment to the 
Home's membership from the citizens of California. 

As part of my job, I contributed to the periodic 
entries into the records of the Fund, and in the furtherance of 
that activity, I made a comprehensive analysis of the trends of 
Fund balances and expenditures. 

At the time the Davis administration was ushered 
in, I probably knew as much about the Fund, at least the Member 



90 

Employment aspects of it, as any person in the Department's 
Finance Section, whether in Sacramento or in Yountville. 

For one thing, I knew the Fund was heading for 
insolvency within the next three years and so warned the 
administration. Actually, it happened in one year. 

I also knew that its precipitous depletion was 
directly attributable to the illegal and irresponsible 
diversions made by Department officials to defray certain 
operating costs of the Home. 

When Mr. Alvarado made his disparaging comment, 
by its tone and manner suggesting that I was nothing more than 
meddlesome ignoramus, all the hope that had come with Governor 
Davis 1 electoral victory, and Mr. Ramos 1 appointment, escaped 
like hot air from a punctured balloon. 

It is a very humiliating experience to have one's 
concerns dismissed so scathingly, especially in front of one's 
friends, as though they were nothing more than frivolous 
claptrap. 

It was also extremely rude on the part of 
Mr. Alvarado to do so, and it speaks volumes about his complete 
lack of leadership skills. 

Fortunately, Mr. Ramos came in at that precise 
instant and invited Mr. Schumucker and me into his office, and 
the meeting with Mr. Alvarado ended. 

It is no great secret that for the last four 
years, of which I have a personal knowledge, and for at least 
another five preceding that, this agency that is entrusted with 
the care of California's aging war veterans has been staffed in 



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its upper eschelons by officials who have themselves displayed/ 
and permitted in their underlings, an attitude of contempt for 
the veterans in their care. That attitude is so prevalent, in 
fact, that people both in and out of the Home have begun to 
accept it as the norm. 

On January 30th, I wrote a letter of reprimand to 
the Deputy Administrator of the Home for the derogatory manner 
in which he addressed Home members during a meeting that I 
chaired. That man is an appointee of Mr. Alvarado. 

On April 1st/ I was advised — in April I was 
advised by at least seven other sources/ including two state 
employees, that the man continued to verbalize disrespect 
directed at the Home membership. 

I wrote another letter to him, sending copies of 
that letter and the first letter to a number of people, 
including Mr. Alvarado. Soon after, the Deputy Administrator 
made a precipitous departure from the Home, and I was advised by 
an official of the Department that/ while he would continue his 
employment with the Department/ he would no longer be involved 
with Home responsibilities. 

Last Tuesday, I found out that this man, who 
holds such low opinions of Home members/ was working in the 
Sacramento office, preparing the Home's budget for fiscal 
2000-2001. That is disgusting. 

It is not unusual for Home members to be lied to 
by officials of the Department. It happens regularly and with 
impunity. 

The real crime here is that an individual who 



92 

holds such alien views towards veterans was given carte blanche 
authority to prepare the Home's budget. This is the same 
individual who prepared last year's budget, and the Home is now 
3.9 million in the red as a result. 

Rather, he should have been discharged. The 
individual, who protects and defends him, dishonors the Governor 
and he dishonors the Home members, and he dishonors his fellow 
employees. 

Such a state of affairs is unconscionable, and 
the very idea of these kinds of conditions should be abhorrent 
to even the most callous and disinvolved person. No other 
single issue outstrips in order of magnitude the hurtful act of 
crushing the human spirit. When that spirit resides within an 
elderly person, man or women, especially one who has spent a 
lifetime trying to do what is morally right, it is a devastating 
and de-humanizing experience. 

Mr. Chairman, you are in receipt of some 
testimony and a letter, I believe, signed by the Chairman of the 
Allied Council endorsing Mr. Alvarado for the position of 
Secretary of Veterans Affairs. The assertions in that letter 
are fashioned of whole cloth, without a shred of truth. Not a 
hint of a canvass was ever made to determine what the 1,125 Home 
members actually do think on the subject of Tomas Alvarado as 
Secretary of the Department, if, in fact, they have a preference 
at all and would dare to voice it. 

As to the preference of the Home's 900 employees, 
to say that they endorse Mr. Alvarado is the rankest joke 
conceivable. I have asked everyone in sight, and I find very 



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few votes, member or employees, for Mr. Alvarado. 

I don't know why the Chairman of the Allied 
Council misstated the facts in such a potentially damaging way. 
Perhaps he thought it was the politic thing to do. 

The leadership of the 3 million veterans that 
reside in California should rest with a man or a woman who holds 
the veterans' interest, rather than his own, close to their 
heart. Mr. Alvarado misses the mark widely in that regard. 

The responsibility of the protection and well 
being of veterans should lie with one who is, in fact, a 
veterans* advocate. Not just one who claims that distinction, 
but one who believes in advocacy to the extent that he will not 
tolerate, from any source, the self-serving desire to humiliate 
the meek or the less fortunate, as we have seen is the ultimate 
expression of Mr. Alvarado 's style. 

Mr. Alvarado carries far too much baggage, some 
of it of the sleaziest kind, damning if true, and unfortunate 
even in its best light, to be an unifying and effective voice in 
the advancement of veterans' interests. 

Finally, he has neither the temperament, the 
education, nor the experience to do an adequate job of directing 
the personnel of the Department of Veterans Affairs and the 
demanding task of rebuilding the Department from the ground up, 
which must, by definition, be the backbone and the heart of any 
effort to make the Department worthy of the 3 million veterans 
it represents, and who Governor Davis has indicated it is his 
intended purpose to honor. 

Thank you, Mr. Chairman. 



94 

CHAIRMAN BURTON: Thank you, sir. 

MR. SCHUMUCKER: My name is John Schumucker. I am 
the past Chairman of the Allied Council for the past three 
years, up until this year. 

In preparation for this paper, George asked me to 
review it and to edit it. I did. I endorse it completely. 

CHAIRMAN BURTON: Thank you. 

MR. ORTA: Mr. Chairman and Members, my name is 
Jesse Orta. I am a life member of the Veterans of Foreign Wars, 
the AmVets, the Retired Officers Association, and a number of 
other veterans organizations. 

I testified before Senate Rules a number of years 
ago as a state employee and paid the price. And some people are 
not willing to come forward. 

I'm here today to introduce into the record a 
summary of the comments by Mr. Bob Haily, a veterans' advocate 
and lobbyist here for many years, which will become familiar to 
you. But he could not get medical clearance because of his 
injuries to come before you. I have his comments to present. 

Mr. Chairman and Members of Senate Rules, this 
confirmation hearing addresses one of the most important — 

CHAIRMAN BURTON: We have them as part of the 
record, so you could just summarize. 

MR. ORTA: This is one of the most important 
veterans issues over the last 20 years, and I respectfully 
submit that veterans issues are not and should not be partisan 
issues. It has been my experience in my more than 15 years of 
legislative experience in representing the American Legion and 



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all California veterans here, at the State Capitol, that both 
sides of the aisle equally support the best interests of 
California's war veterans. 

Premiums for the Cal-Vet Loan Program have been 
drastically increased, and coverages have been reduced. A 
recent audit of the County Veterans Service Office Program 
points out serious shortcomings in the provision of first-line 
services through this particular program. This fact can be 
directly attributed to the Department's weak management, lack of 
leadership responsibility, and a specific failure to enforce or 
comply with federal and state statutes designed for such 
oversight and control. 

Dan Walters' article in the Sacramento Bee just a 
few months ago makes the point. The California Department of 
Veterans Affairs is clearly the worst department in California 
state government through sheer managerial ineptness. 

The Department of Veterans Affairs is not alone 
in responsibility for the lack of viable administration of 
veterans' benefits and entitlement. Most major veterans 
organizations consistently endorse weak or incompetent 
candidates based on personality or favors. It is often said by 
rank and file veterans that there is more political posturing in 
the hierarchy of their own organizations than there is in the 
State Capitol. 

Such endorsements submitted here today will serve 
as a good example of the will of the elite leadership, and not 
necessarily of the membership. 

Another entity which must share the 



96 

responsibility for the years and years of poor performance of 
the Department of Veterans Affairs is the California Veterans 
Board. The Board has the statutory responsibility to set all 
policy for the Department in the best interest of California's 
3-plus million veterans. 

CHAIRMAN BURTON: Sir, I wonder if you might be 
able to summarize, because we do have it for record. There's 
other people, and we do have to be out of this hearing room at a 
time certain. 

MR. ORTA: Members of the Committee, the 
Department of Veterans Affairs' administration and management is 
broken, has been for a number of years. Today's candidate was 
previously a part of this same management team as Deputy 
Director during the Pete Wilson administration, a position he 
surrendered under considerable pressure. 

During the 11 months that this candidate has 
presided, the situation has only worsened, and to confirm him 
today will only ensure the perpetuation of the status quo. 

California war veterans' time has run out. It's 
time to appoint a Secretary with the ability to get the job 
done. 

Thank you very much. 

CHAIRMAN BURTON: Sir. 

MR. DEW: Good afternoon. My name is Lionel Dew. 
I reside in the Victor Valley. I am a 21-year Air Force 
retiree. 

Within the 21 years of being in the military, 
I've learned a great deal as relates to management. One of the 



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things that disappoints me today is that I come here all the way 
from Victorville, listening for or wanting to hear the 
accomplishments of the current administration headed by 
Mr. Alvarado. I heard none. 

I wanted to hear about the efficiency. I want to 
hear about the progress that was made. I want to here about the 
successes. I want to hear about a plan. I heard none of that. 

In fact, one of the most disappointing things, I 
believe that Mr. Alvarado' s testimony cuts against him. In 
itself, it was something that was truly something that I didn't 
expect. 

Mr. Alvarado mentioned that a consulting team was 
brought in, in Barstow Home, regarding the documentation to have 
the physicians, nurses, and medical staff to document. But as 
we all know, doctors, nurses and medical staff are trained to 
document. There wasn't a need for consultation. What was 
needed was enforcement; enforcement to document, because after 
all, that's what they get paid to do. That's what they're 
trained to do. And that's what should have taken place. 

What is needed is, clearly, a person outside the 
box, not a deputy who moves up to become the Secretary of 
Veterans Affairs, but clearly somebody out of the box. Why? 
For three reasons. 

If you really want to have a new page, a new 
tomorrow, a new beginning, you're going to have to find someone 
outside the box to do that. That person would deliver to 
veterans three things. One, equal access; equal opportunity; 
equal treatment. That's something that's critical. It's 



98 

important. Every American deserves it, and veterans deserve it 
no less than anyone else. 

I urge you not to necessarily vote against 
Mr. Alvarado, but vote in fact for a new beginning, a fresh 
start, because it's definitely needed. 

If someone has been part of the problem, I see no 
way how they can be part of the solution. 

Thank you. 

DR. SEKHON: Mr. Chairman, I'm Dr. Arjinderpal 
Sekhon. 

I had the opportunity of serving the United 
States Army at the rank of a full Colonel, and I was a Commander 
of three medical units. One of the units I was commanding, 
Alfonso Navarro, Dr. Navarro, was under my command and also 
Major Gandara. 

I find those people to be excellent, excellent 
officers in the United States Army. They both served with me 
during Desert Storm. 

Losing Mr. Navarro, or Dr. Navarro, from the 
Veterans Home is the biggest loss the California veterans can 
have. 

By looking and listening to Mr. Alvarado, I don't 
think he has any leadership qualities. A person who does not 
know what his people have, and what kind of qualities they have, 
and does not pick up the right team, always lose. 

I don't think he — he may be an excellent person 
with a great record, being a veteran. I respect him for that. 
But I don't think he has the capability to be a commander of any 



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unit. And he should not be appointed as Secretary, because if 
he has any sense, he should have never let Dr. Navarro leave 
that job, because that person was one of the best officers I 
ever served during my 15 years in the United States Army. 

Thank you. 

CHAIRMAN BURTON: Thank you, sir. 

MR. AMARO: Thank you, Mr. Chairman. My name is 
Alan Amaro, A-m-a-r-o. I'm one of the, as somebody called 
earlier, rascals that sent you a lot of this information that 
you had to digest. 

I'm going to be short and brief as I possibly 
can, because I've sent you all this information. 

CHAIRMAN BURTON: Yes, and we have it all. 

MR. AMARO: Well, then, I'm going to give you 
some personal experience about what has happened within the last 
couple weeks. And I'd like to let you know about that so you 
can make further considerations. 

First off, Mr. Alvarado says it was the previous 
administration, previous administration. He was part of the 
previous administration. So, if there's any fault, accept 
that. 

His attitude is chiefly lacking in the respect 
that I've been two public forums within the last year, one being 
within the last two weeks, where Mr. Alvarado stood up in a 
public forum, with not only military veterans and their 
dependents there, but public agencies and public utility 
companies . 

Mr. Alvarado talked about his slash-and-burn 



100 

tactics, and who he'd fire, and how he fired all these people. 
And he pointed to the person that was next to him, Mr. Ron 
Branch, said, "I'll fire you also if you don't do what I say, 
and I'll take everybody to task." He said, "I don't care what 
anybody tells me, I'll suffer the consequences later." 

That is not a leader. Mr. Alvarado is his own 
worst enemy. 

I come here today before you. I have nothing to 
lose; I have nothing to gain. 

Those that have testified before you have 
something to lose or gain. I'm talking about the supports, not 
every single person. But I hope you, and I know you do, because 
I've testified here before, understand that there's pros and 
cons to everything. 

My summary would be, Mr. Alvarado personally, and 
in my own presence, is a rude individual, lacks the leadership 
qualities that California — that establishes,, and I say this 
great state has established not only economically, 
electronically, sets the pace for the rest of the nation. 

If we offer the rest of the nation someone of 
this moral character, then we get what we deserve. 

Thank you very much. 

CHAIRMAN BURTON: Thank you, sir. 

MR. DOLMAN: Senator Burton, Members of the 
Committee — 

CHAIRMAN BURTON: Please, sir, summarize. 

MR. DOLMAN: It's going to be quick. Could I 
have about two minutes, maybe. 



way 



101 

CHAIRMAN BURTON: You've got it. 

MR. DOLMAN: I'm a native San Franciscan, by the 

CHAIRMAN BURTON: You've got 10 minutes. 

[Laughter. ] 
CHAIRMAN BURTON: And from the Mission District, 



I'll warrant. 



MR. DOLMAN: South of the slot. You've got it. 

CHAIRMAN BURTON: South of the slot, you've got 
20 minutes. Go for it. 

[Laughter. ] 

MR. DOLMAN: I'm a Navy veteran of both World War 
II and Korea. My name is Robert Dolman, D-o-l-m-a-n. 

The past 16 years, I've served as President and a 
member of the San Andreas Veterans Memorial District, and 4 
years ago — 5 years ago, Governor Wilson appointed me to his 
task force and subsequent commission to acquire land in Southern 
California for the veterans homes at Barstow, Chula Vista, 
Lancaster, and Ventura. I worked with Senator Pete Knight very 
closely over those years. 

The last four years, I have served as a member of 
the California Veterans Board. I just completed my term here a 
few weeks ago. I served there as a member, Vice Chairman, and 
Chairman. 

Since my letter to you and the Committee here on 
the 15th of April, it has come to my attention that Veterans 
Board, including Tomas Alvarado, sitting next to me, who is both 
a member of the Board and Secretary of the Department, is aware 



102 

of Sections A-6 and A-7 of the Veterans Policy Book, which 
mandates, quote, "the Secretary to present to the Board for its 
prior review and consideration all requests for proposal and 
invitations for bids where the anticipated amount of the 
contract is in excess $250,000." 

I then gave four Minutes — December, January, 
February, and March to present. The Minutes reflect there in 
December that this was properly done, with the Bond Finance 
Division consulting contract in the approximate amount of 
$750,000 was approved by the Board as was required to do. 

January 8th Minutes show Mr. Alvarado present and 
remained mute when Board Chairman stated, quote, "There has been 
no new activity of policy and procedures, and nothing new this 
month to bring before the Board." 

Alvarado was at that instant negotiating a 
sole-source consulting contract in the amount of $850,000 with 
Len Blair and Associates for the January to September period of 
this year to help bring up the standards at the Barstow 
facility. That source was the L.A. Times , which I've already 
furnished you. 

On February 2 6th, the Minutes then reflect 
Mr. Alvarado stating, quote, "official word has just been 
received that the Department of Health Services for the Veterans 
Home at Barstow is in compliance with regulations." 

He then said, "There are still some areas that 
need a little more attention, " but did not mention the 
sole-source contract of $850,000 nor the terms thereof. 

And one person and one contract is tantamount of 



103 

sending a lettuce leaf via a rabbit. You're supposed to laugh 
at that one. Think about it. 

CHAIRMAN BURTON: I didn't even understand it. 

MR. DOLMAN: One person and one contract of that 
magnitude, no one else knows about it, now you got it. 

The Sacramento Bee articles of April and May 
state the Department of Veterans Affairs spent so much money to 
get the Home recertificated, we're now curtailing spending at 
Barstow to avoid going over budget. And this is reducing 
day-to-day assistance for patients even further. 

Finally, Tomas Alvarado has placed Governor Davis 
in a most embarrassing position. And our Governor and fellow 
veterans do not deserve this. 

The only mistake made was to appoint Alvarado in 
the first place. His track records over the past ten years is a 
fiscal disgrace: total lack of leadership and a complete void 
of business knowledge, integrity, and compassion. 

Tomas Alvarado has cost California taxpayers 
multi-millions of dollars unnecessarily, which increases daily. 

I respectfully request the Members of the Rules 
Committee to spare our 3.1 million veterans, United States 
veterans, now residing in California from further dereliction by 
Tomas Alvarado, as has been heaped upon us, and reject his 
confirmation as Secretary of Veteran Affairs. 

Thank you. 

CHAIRMAN BURTON: Thank you, sir. 

Ma ' am . 

MS. JONES: My name is Lynne Jones. I'm a 



104 

Cal-Vet -- my husband and I are Cal-Vet Loan -- Farm and Home 
Loan. And to the day, yes, we have not had our home foreclosed/ 
but I have received notices that I will be having my home 
foreclosed because of the disability insurance. 

So, I'd like to know what's going to be done? 

My husband has passed the two years, the 24 
months, whatever you want to call it, and we've been paying 
since '85. And we were told it would be to the length of the 
disability. 

Now we're in a position of losing that home. 

CHAIRMAN BURTON: Thank you. 

MR. GANDARA: Hi, I'm Major Gandara, the 
gentleman that Colonel Sekhon, my fellow commander, and Colonel 
Navarro, my former supervisor, alluded to. 

I am one of the rascals. I am one of the 
victims of the Barstow Veterans Home. I have felt Tomas 
Alvarado's wrath through himself directly and through his 
supervisors at the Veterans Home, because I made a fatal mistake 
of wanting to file a discrimination complaint because of the 
misconduct that was occurring at the Home. 

I'll make my presentation really short. 

Out of the 13 individuals that have received 
administrative time off, which is equivalent to house arrest, 
where we stay home, that is at taxpayers' expense. I have gone 
to find assistance, because never in the whole time the Under 
Secretary Alvarado and now Secretary Alvarado has been in the 
DVA, did he ever make an effort to ask me what was my problem. 

I did have the unfortunate opportunity to run 



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into Mr. Alvarado, because, as Sam Ortega mentioned/ he came to 
my place of employment and singled me out. Took me outside the 
building, and said, "what's your problem? I hear you have an 
attitude." 

I said, "No, I don't." 

I'm a Major in the Reserves. I follow orders. 
But I have a right to my opinion. 

I've been under this malicious misconduct for two 
years; two years. I have gone to the Department of Fair 
Housing, to the EEOC, to the State Personnel Board, to the Labor 
Commissioner, to the Board of Licensing, to report Mr. Bill 
Regoli for his malicious manipulation of employees at the Home. 
I have gone to the Inspector General, Jerry Hanson. They come 
and they go. They want to hear the truth, and they do nothing. 

I've even written a letter to the Governor, and 
he has done nothing. And if the Governor's not interested in 
holding Tomas Alvarado accountable, how can he ever be expected 
to be in compliance? 

I'm shocked to see the Union here. I couldn't 
even get them to come to my hearing, but they were here for 
Mr. Alvarado. 

I filed eight Union grievances. I've even spoken 
to Bruce Thiesen. I've talked to the Personnel Officer, Joy 
Hempstead, and nothing has happened. Mr. Alvarado has the 
audacity to say he's not aware of any problems. I find that 
shocking. 

As my co-worker, Denise Hall, had mentioned, I 
also sat in the room when Mr. Alvarado stood there and addressed 



106 

75 of us; three meetings that day. And he was vulgar, and he 
was racial. He did say to everyone as a whole, "If you don't 
like my policies, there's the God damn door. I will file you 
first before, and I will deal with the legal consequences 
afterwards . " 

And what really disturbed me was that he referred 
to himself as "the little, short, fat Mexican" in that hearing. 
I'm an American of Mexican descent, and I find that very 
offensive, that the Secretary of my Department can use such 
racial slurs during an open meeting like that. 

I, too, was once a commander of the 34 9 General 
Hospital. We do not talk to our subordinates like that. They 
can't even lead by example in the DVA, and that's pretty sad. 

So, your vote today to confirm or not confirm 
Mr. Alvarado basically determines whether myself, and Denise 
Hall, and the other employees that are fearful of retaliation, 
and believe me, it does exist, if we will continue to be victims 
of Tomas Alvarado 's regime, is basically what it is, a regime. 

That's all I have to say. If there's any further 
questions — and I apologize. 

CHAIRMAN BURTON: No problem, sir, not at all 

Ma ' am . 

MS. POWERS: Good evening. My name is Phillis 
Powers, and I'm the former Executive Officer to the California 
Veterans Board. And I'm a very proud daughter of a deceased 
veteran who died a year ago from being exposed to atomic bombs 
ten times. 

Before my father passed, he said, "Continue to 



107 

fight the fight. I'll help from the other side. You do this 
side, daughter," and I said, "Okay, Dad." 

When I started working for the Board, we had no 
computer, we had no fax machine. We had no copier. We had no 
typewriter. So that I had go outside the building to the sixth 
floor to get to know how the Department worked, and also get 
some equipment donated to the Board so that I could function and 
do my job. 

In it, I didn't understand where policy was at, 
because no one knew where policy was at. So, I asked Hal 
Jackson, who was the counsel at the time, what runs this 
Department of Veterans Affairs? He said, "Phillis, if you don't 
know anything else, go by the Military and Veterans Code Book." 

The Military and Veterans Code Book has been in 
force since 194 6. It was put together by our veterans and 
distinguished Legislators like you, you gentlemen and women. We 
already have laws on the books . What the problems that happen 
is that we don't have any of our administrators enforcing the 
laws that are on the books, which cause these continual 
problems. 

One, an example, is the Cal-Vet Life and 
Disability Insurance Program. The way the Board heard about it 
was in the Sacramento Bee , August of 1996. We were unaware of 
any problems whatsoever. 

I had got a flurry over 500 calls in one week. 
The Board didn't know what was happening. 

A month later, in August in Monterey, that's when 
the Department told us what the problems were. I was 



108 

overloaded. I was the only staff member. We were getting a 
thousand complaints in. I could no longer handle it. 

Senator Johannessen, Assemblyman Baca, all these 
hearings have been over and over, just talking about all the 
problems that are happening with the Department of Veterans 
Affairs. 

Mr. Alvarado follows the same pattern that has 
been passed down for 40 years. I researched the files from 1963 
to 1996 before they let me go . It's same pattern. Hearing 
after hearing, the same problems, the lack of our veterans being 
cared for, the book not being enforced. 

So, I would just ask you Legislators, that's what 
we put you in law, in your positions for, to please help and 
protect our veterans, and to enforce the Military and Veterans 
Code Book. We already have laws on the books. They just need 
to be enforced. 

CHAIRMAN BURTON: Thank you, Ma'am. 

MS. POWERS: Thank you. 

CHAIRMAN BURTON: Sir. 

MR. BENTON: Good afternoon, Senators. My name 
is Arthur Benton. 

I am the one that started the letter to the 
Governor. 

The Department of Veterans Affairs, the motto 
used to be, "Putting Veterans First." Now it's "Serving 
Veterans Since 1946." What are they serving? 

The discrepancies, we can go through all this. 
You've heard them all, all the innuendoes and everything else. 



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But I would like to know, and if somebody can 
answer me, where is the US DVA Inspection Report? It hasn't 
been signed off. 

The morale out there at that Barstow Home — and 
I have been there since day one, when the first shovel was 
throwed of dirt to start the building, the people there — I 
don't know. I have the letters from — and Mr. Alvarado says he 
does not know me? Well, that's awful funny. 

He called me at home regarding the letter to the 
Governor, and my comment was, I had just come back from SEC, and 
I was not ready, and I couldn't answer him. If he would give me 
a second, and he went off on me. And I told him, in point-blank 
words was, I don't have to listen to this, you ass hole, and 
hung up. 

I don't know if you have read any of this, or 
read of these, but I've lost my point. 

CHAIRMAN BURTON: You're making it. 

MR. BENTON: And I am so sick of this Barstow 
Home the stuff that's been said out there. The employees, the 
nursing staff, the doctors, the veterans themselves have wrote 
these letters, and the only way I said I could tell them to help 
me was that they wrote these letters and signed them in black 
and white. 

I did that. I sent them to the Governor, and 
this is what happens, and this is what we pick to represent our 
veterans? I don't think so. 

To me, I would not — I would not put my worst 
enemy or my relatives in that Barstow Home, because I would fear 



110 

for their lives. 

Thank you, gentlemen. 

CHAIRMAN BURTON: Would you mind leaving the 
letters with us. 

MR. BENTON: Yes. I have to get the copies — 
oh, you want the originals? 

CHAIRMAN BURTON: No, copies, anything. 

MR. BENTON: Okay, I think I have the copies 
outside. I'll get them and drop them off. 

CHAIRMAN BURTON: And if you don't, we'll make 
copies of them and keep them, because this hearing process isn't 
over today. 

MR. BENTON: Okay, thank you. 

CHAIRMAN BURTON: Thank you. 

Sir. 

MR. ESTRELLA: Good afternoon, ladies and 
gentlemen. My name is J. R. Estrella. I'm here as an 
individual. I am a commissioner on the California Mexican 
American Veterans Memorial, but I'm not representing them. I'm 
here as an individual. 

I am here to give personal testimony against the 
confirmation of Mr. Alvarado. My information is based on very 
personal contact with Mr. Alvarado. 

I was not made — I was not given a copy of his 
latest resume. I was able to glance at one a while ago. He 
conveniently left out the almost year that he spent on an 
outreach project called the South West Republican Project. 

We had hired him. I was the Executive Director. 



Ill 

We had hired him as the outreach worker. 

At first, I've got to tell you, I was very 
impressed, you know, that he was a good man. As time went 
along, came to find out different. 

Among the things that I came to realize, 
because — this is not hearsay, ladies and gentlemen, this is 
first-hand experience — I traveled with Mr. Alvarado. We 
stayed in the same hotel rooms. So, I bring to you first-hand 
knowledge . 

He has a definite sobriety problem. The reports 
that I would get back from the field were that not only was he 
rude and abusive, very condescending. 

When approached about it, of course, he would 
deny it. 

There's a common thread that weaves through 
everything you've heard to date, ladies and gentlemen. And what 
I am saying to you is basically to reinforce that. 

Everybody has talked here about intimidation, 
attempts to intimidate. I've also been a victim of that. 

I wrote a letter, because it was Senator John 
Polanco, who was kind enough to nominate me to the Commission. 
When I found out that Mr. Alvarado was being considered for this 
position, I wrote a letter to him. My letter went to Senator 
Polanco on June 3rd. On June 18th, I got a letter on Department 
of Veterans Affairs letterhead, addressed to me, basically 
accusing me of overstepping my boundary as a commissioner, 
citing a couple of military codes that I had violated. 

Well, I've got to tell you, I was very worried 



112 

about that. So, I went to my attorney. I made some phone calls 
up here with the rest of the committee I was working with. Come 
to find out that it was a deliberate attempt to mislead me, 
because what they were really talking about was the neutrality 
of the design of the memorial. 

Since then, I've been subjected to harassment. 
My patriotism has been questioned. My loyalty to the Mexican 
Americans has been questioned. You know, weird phone calls, on 
and on and on. 

But again, you know, the truth is always the 
best. And I'm willing to stand up for what I believe in, and I 
do not believe that Mr. Alvarado possesses the integrity nor the 
ability to manage such an important job. 

Thank you very much. 

CHAIRMAN BURTON: Thank you, sir. 

MR. VARGAS: Mr. Chairman, Senators, I'll be very 
brief, two minutes. 

On Saturday, I had decided not to come over here 
and say anything, because — 

CHAIRMAN BURTON: Your name, sir? 

MR. VARGAS: I'm Selso Vargas. I'll go further. 
I'm 25 years with state government, a veteran of Vietnam, and 
I've known Tom since 1986. We worked together. I used to be 
the Deputy Director of Communications for Governor George 
Deukmejian way back when I got to know — not Communications, 
Community Relations, excuse me. 

On Saturday, I got a call from one of the two 
ladies that gave you those letters of harassment. And she 



113 

implored upon me to come over here and that's why I'm here in 
part, is to underscore what she had to say. I can't give out 
her name, but she's one of those two. 

I can tell you later, if you wish. 

There's a letter here that also got me here, and 
that is one that he wrote to Assemblyman — 

SENATOR HUGHES: Mr. Chairman. 

CHAIRMAN BURTON: Senator Hughes. 

SENATOR HUGHES: Mr. Chairman, I'm going to make 
an unusual request, and that request is, since the parents of 
this little girl, Mr. Alvarado's daughter, have not excluded her 
from this hearing, I would like to ask, as a mother and a 
grandmother, that your daughter be excluded from hearing any 
further testimony, because this is getting to be too 
embarrassing to me, as a mother and a grandmother, to have your 
daughter sitting here, Mr. Alvarado. 

I would like to appeal to you and the mother, and 
mother has heard my plea. Thank you very much. You're married 
to — well, if that's not the mother, whoever that nice lady 
was — 

MR. ALVARADO: That's the mother. 

SENATOR HUGHES: That's fine. I thought it was. 

I think it's very nice to exclude the child 
because this is your child, and I don't think she should be 
subjected to what we might hear. 

Thank you, sir. That shows very good judgment on 
your part . 

Now you can say anything you want. 



114 

MR. VARGAS: One last thing, there is a letter 
here from Tom Alvarado to Assemblyman Lou Correa where he takes 
credit for a lot of work that wasn't done on his part/ and that 
deals with the California Mexican American Veterans Memorial. 

Between '92 and '94, I was the President and 
Chairman of that committee. In his letter to the Assemblyman, 
he takes credit for helping on the legislation, develop it, and 
implement it. That was AB 1350, that established the 
Commission. That's one item. He had nothing to do with it 
whatsoever. 

About giving us office space in the Department of 
Veterans Affairs, he claims that it was through his doing and 
urging that that occurred. That was not the case. I have a 
letter from Senator Polanco to then-Admiral Hacker, that ran 
that Department, imploring him to make that available, and 
that's how that happened. 

Throughout the two-and-a-half, three years that I 
was Chairman of that committee, Tom never attended one meeting. 
He told me personally that he didn't want anybody on our 
committee to be considered for the Commission, even though we 
brought up the legislation. 

And I guess I'm here to tell you, as recent as 
April 28th, which is when this letter was written, the man is 
telling you things that are not true. That went to the Latino 
Caucus. It went to Lou Correa in particular, the Assemblyman. 
I don't know if you folks have gotten a copy of that. I have it 
here . 

And it bothers me that we're considering, or 



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you're considering, the possible appointment of somebody that 
can be so flagrantly out there with the truth or nontruth. 

That's all I have to say. 

CHAIRMAN BURTON: Thank you. 

Mr. Alvarado, I want to ask a couple questions, 
then you can respond. Then we'll recess the hearing at the call 
of the Chair, because the Members have informed me they have 
some questions they need answered within themselves before they 
decide to vote on this. 

But going down the list of the people that were 
restricted: Navarro, Gandara, Hardwick, Hardwick, Holland, 
Hall, Vu, all of which had home restriction, whatever that is, 
in excess of 15 days, where the Code only says 15 days. It does 
not provide for an add-on. That's not allowed by law. 

MR. ALVARADO: It's like house arrest, it seems 



to me. 



CHAIRMAN BURTON: Pardon me? 

MR. ALVARADO: It sounds like house arrest. 

CHAIRMAN BURTON: You were the one that was doing 



it. 



MR. ALVARADO: No, sir. I was not doing it. 

CHAIRMAN BURTON: Who was doing it? The person 
under you was doing it, Mr. Davis. 

MR. ALVARADO: No. 

CHAIRMAN BURTON: Who was doing it? 

MR. ALVARADO: Well, sir, I knew of the actions 
that were taken of these two individuals here. The other ones, 
I don't know who they are. I have no idea who they are. 



116 

CHAIRMAN BURTON: Who could take that action if 
it's not you or Mr. Davis? 

MR. ALVARADO: No, it's the administrator at the 
veterans home. 

CHAIRMAN BURTON: And they're allowed to do stuff 
that's not authorized by law? 

MR. ALVARADO: No, sir, they're not supposed to. 

CHAIRMAN BURTON: Well, they do it. 

MR. ALVARADO: That sounds to me like they are, 
and I'll address it with them directly. 

CHAIRMAN BURTON: Well, you've got three of the 
people. You have people who resigned, people terminated, people 
out on comp, which could well be a stress thing, four resigned. 

I mean, it kind of gets into management. 

Joy Hempstead, who is she? 

MR. ALVARADO: She's my personnel officer. 

CHAIRMAN BURTON: So, does she work under you? 

MR. ALVARADO: That's correct, sir. 

CHAIRMAN BURTON: Who's Bob Gray? 

MR. ALVARADO: Bob Gray is a former administrator 
who worked at the home in 1999 for a couple of years. He was 
hired back in '98, I believe. 

He was — it was under his administration a lot 
of these took place, with the exception of Miss Hall. 

CHAIRMAN BURTON: I'm sorry, it was what? 

MR. ALVARADO: It was under his administration, 
his tenure, that all these personnel matters took place. 

CHAIRMAN BURTON: But it's his tenure, your 



117 

tenure. You were there, too. 

MR. ALVARADO: I got there, of course, '99, and 
these activities took place before the '99 period. 

CHAIRMAN BURTON: How about October 8th, '99? 

MR. ALVARADO: Who was that? 

CHAIRMAN BURTON: Gandara . 

MR. ALVARADO: Gandara? I believe his has been 
ongoing for a number of years. I'd have to check with the 
personnel officer. October wasn't the first time he's had 
personnel action involved. I'd have to go back and check with 
my personnel officer. 

But it did not start October, '99. 

CHAIRMAN BURTON: It says Robert Gray was there 
December 27th, 1999. You were there then, right? 

MR. ALVARADO: Yes, sir. I relieved him when we 
had some problems with the Department of Health Services survey. 

CHAIRMAN BURTON: Why don't you respond, then 
there may or may not be questions of the Committee. 

SENATOR HUGHES: I have one, please. 

I read the Sacramento Bee like everyone else does 
here in Sacramento. It was reported by the Sacramento Bee that 
you were to be terminated, and you resigned from the Department 
before you were terminated in fact. And that had to do with the 
Cal-Vet home loan program. 

Is that true, or is it just gossip, or is the 
Sacramento Bee incorrect? 

MR. ALVARADO: The Sacramento Bee's incorrect, 
Senator. I made a decision to return home because my daughter 



118 

was, at that time, she was a four-year — she literally grew up 
without me when she was born. 

I talked to the then Chief of Staff, Bob White, 
about three weeks ago, and asked him if he had any knowledge of 
a tentative or upcoming term inaction. He said he didn't. 

It was my decision solely. I had enough of 
commuting back and forth every weekend. And when I got home on 
weekends, I'd be on the road. And it was having a terrible 
strain on my family, so I just — 

SENATOR HUGHES: I thank you very much for 
allowing your wife to take your daughter out, because I think 
it's terrible to see an inquisition like this about your parent, 
whom I assume you adore, like all children do. 

CHAIRMAN BURTON: May I say something, please, 
Senator? 

SENATOR HUGHES: Yes. 

CHAIRMAN BURTON: We're informed that when 
Mr. Gray put these people on suspension, you were the Secretary. 
And Mr. Gray has said that many of these were, I guess, done on 
your instructions. He made the calls on your instructions. 

MR. ALVARADO: That's not correct, sir. That's 
not correct. 

CHAIRMAN BURTON: So, either he's not being 
accurate in his remembrances, or you're not? 

MR. ALVARADO: I think I'm a pretty good act of 
memory, and that is not correct, sir. That is not correct. 

CHAIRMAN BURTON: Well, that's what our 
investigations have found. 



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Senator Hughes. 

SENATOR HUGHES: Have you ever been accused of 
sexual harassment against a female employee, or by any other 
employee? 

MR. ALVARADO: No, ma'am. 

SENATOR HUGHES: So, someone just manufactured 
this from out of the blue? 

MR. ALVARADO: Well, I have never been accused of 
any sexual harassment in my entire 30-some-odd years of working 
in a professional capacity. 

SENATOR HUGHES: What is the requirement for the 
amount of sexual harassment sensitivity training that people in 
your agency are required to take? 

MR. ALVARADO: Last — when I was first 
confronted with these letters — 

SENATOR HUGHES: No, I want you to answer the 
question that I asked you, then you can add the addendum to it 
afterwards. 

MR. ALVARADO: Well, we 

SENATOR HUGHES: Do you know the rules and the 
regulations? You're the head of the Department, so I'm asking 
you. 

What is the requirement for the amount of sexual 
harassment training you are required to take at your level, and 
then the sexual harassment training that anyone beneath you is 
required to take? 

MR. ALVARADO: At my level, we had a six-hour 
training on sexual harassment civility training last October at 



120 

the -- with all the executive staff and the principal managers 
within the division, as well as veterans homes. 

SENATOR HUGHES: So, all of the employees have to 
take the same amount of sexual harassment training? 

MR. ALVARADO: In this case, we didn't require 
that, Senator. We just did the executive and senior managers. 

SENATOR HUGHES: But you did take it? 

MR. ALVARADO: Absolutely, yes, ma'am. I was the 
one that suggested it. 

SENATOR HUGHES: And those people directly below 



you took it? 



MR. ALVARADO: That's correct. 

SENATOR HUGHES: How long ago was that? 

MR. ALVARADO: This past October, I believe it 



was. 



SENATOR HUGHES: And then prior to that time when 
you were employed, how many times did you take it? 

MR. ALVARADO: I don't recall ever taking this 
kind of sexual harassment training. It was never — 

SENATOR HUGHES: So, it was your idea? 

MR. ALVARADO: Yes, ma'am. 

SENATOR HUGHES: That you took the sexual 
harassment training? 

MR. ALVARADO: Yes, ma'am. We did it statewide. 

SENATOR HUGHES: So, you were sensitive to this, 
and you would never make the mistake of sexually harassing 
anyone or leading them to believe that they were sexually 
harassed? 



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MR. ALVARADO: Absolutely not. I wouldn't do 
that. I never have, and I can't condone it. 

If I may. Senator — 

SENATOR HUGHES: Did you promote an attorney to 
the position of Chief Counsel when or while an individual was 
accused of sexual harassment? 

MR. ALVARADO: Yes, ma'am. That case was already 
in the process. This was last May, I believe it was. And he 
was, I guess, acquitted of the charges in the court. 

SENATOR HUGHES: But you did promote him while 
that was going on; is that correct? 

MR. ALVARADO: Yes, in the final stages of the 
litigation, yes. 

SENATOR HUGHES: Thank you. 

MR. ALVARADO: You're welcome. 

SENATOR LEWIS: I had a question, looking at all 
this paperwork. There's a letter signed by Robert Gray to 
Mr. Gandara, referencing his being put on paid administrative 
leave. It's dated October 8th, 1999. 

Did I hear you say that you relieved Mr. Gray 
from his post? 

MR. ALVARADO: Yes, Senator, I did, once the 
final results of the second survey that was conducted by the 
Department of Health Services. 

I was led to believe by Mr. Gray that we had no 
problems at Barstow with respect to the survey. 

SENATOR LEWIS: What was the date that you 
relieved him of his duties? 



122 

MR. ALVARADO: I believe it was November. I'm 
pretty sure it was November. I'm not quite sure exactly, but I 
think it was November, on or about, but I'm not sure. I think 
it was November. 

CHAIRMAN BURTON: Is that accurate information? 
Shall we say that there was a release or a statement by the 
Department of Health Services that somebody died at Barstow? I 
guess the statement came out today, and they're looking into it. 
Do we know anything about that? 

MR. ALVARADO: I believe the individual was back 
on February 11th. What we were led to understand is that he 
died of a coronary, of a heart attack. 

CHAIRMAN BURTON: Somebody died, and they're 
looking into it. Somebody just died, and they're looking into 
it. 

MR. ALVARADO: On February 11th? 

CHAIRMAN BURTON: No, I think today. 

MR. ALVARADO: No, no, no. That was February 
11th. 

CHAIRMAN BURTON: Why would they put out a 
statement today about February 11th? 

MR. ALVARADO: I just talked to Dr. Bunta a 
little while ago, and I didn't think she mentioned any — made 
any reference about dying today. 

CHAIRMAN BURTON: That's a break. 

SENATOR HUGHES: I don't want to beat a dead 
horse, but you gave me fairly good answers to the other 
questions that I asked you about the sexual harassment 



123 

allegations. 

And the Concerned Veterans sent you a letter to 
clarify if three — not one — but three female employees had 
filed sexual harassment complaints against you during the Wilson 
administration. And you had refused to answer the letter, but 
you answered my questions directly. I appreciated that. 

Why did you refuse to answer the letter? 

MR. ALVARADO: I believe we did, because we 
referenced them to — I forgot what the nature of the response 
was, but I recall that letter, and we did respond to it. 

SENATOR HUGHES: Do you have a copy? 

MR. ALVARADO: No ma'am, I don't. But I can get 
it faxed to you. 

SENATOR HUGHES: You will find or make up one; 
right? 

MR. ALVARADO: No, ma'am. There is a letter, 
because I recall when we got the letter — 

SENATOR HUGHES: I'm not being sarcastic. I'm 
being very emphatic about that because they're talking about 
your reputation, and if you don't protect your reputation, how 
do you expect anybody else to believe that you have a good 
reputation? 

I think it's very, very important that, if you 
have some allegations like this, that you would want to have it 
on file; right? 

MR. ALVARADO: Yes, ma'am. 

Senator, if I may, over the past 15 years, there 
have been three allegations of sexual harassment in the Farm and 



124 

Home Division. And all three of those individuals were fired. 

SENATOR HUGHES: No, all three of those 
allegations were against you, sir. 

MR. ALVARADO: That I've seen. 

CHAIRMAN BURTON: Sir, we're not talking about 
allegations against other people. 

MR. ALVARADO: What I was getting to is, there 
haven't been any charges or complaints about my behavior. 

SENATOR HUGHES: But these three letters were 
about other people that worked for you? 

MR. ALVARADO: Senator, I don't know who those 
people were. It doesn't matter. I didn't do — I wasn't — I 
didn't condone, or I don't condone that kind of activity, and I 
don't practice it. 

SENATOR HUGHES: But the answer is, no, the three 
letters were not about you regarding sexual harassment? Is that 
right? 

MR. ALVARADO: Well, that would be my answer, 
ma ' am. 

SENATOR HUGHES: No, not would be. This is not 
the Millionaire Game, where you've got to guess the right 
answer. 

I want the truth from you, sir. 

MR. ALVARADO: I am giving you truth, Senator. I 
am giving you the truth. 

I would not subject anyone to this kind of 
embarrassing situation if I didn't explain or express my truth 
to you. 



125 

SENATOR HUGHES: But the truth is that those 
complaints were not against you, yes or no? Yes or no? 

MR. ALVARADO: No. 

SENATOR HUGHES: Well, I don't read sign 
language. Okay, no. 

Thank you. 

CHAIRMAN BURTON: All right, the Committee will 
be in recess upon the call of the Chair. We will be back in 
touch with you. Members have shown the desire not to vote 
today, but to look at some of the information that's been 
provided us, give them a chance to discuss it. 

So, we are quite aware of the deadline date. 
Unfortunately, your hearing was put over a week at the 
Governor's request, which kind of cost you some time and puts us 
in a shorter timeline than the Committee likes to deal with, but 
we will do that. 

If there's nothing more to come before the 
Committee. 

[Thereupon this portion of the 
Senate Rules Committee hearing was 
terminated at approximately 5:25 P.M.] 
— 00O00 — 



126 

CERTIFICATE OF SHORTHAND REPORTER 

I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

Jf IN WITNESS WHEREOF, I have hereunto set my hand this 
day of ^I'Y^A^*]^ / 2000. 




J. /MIZAK 
Shorthand Reporter 



127 



TESTIMONY BEFORE THE SENATE RULES COMMITTEE 

May 8, 2000 

My name is Samuel S. Ortega, and I am a resident of Sacramento. 

Background 

Retired State Employee - 30 years of State Service 
Life Member of the Veterans of Foreign Wars - Post 85 
Board Member, Latino Senior Citizens in Action 
Board Member, CAMAVM Inc. 

Thank you for the opportunity to speak. 

Opposition 

I am opposed to the confirmation of Mr. Alvarado because he does not posses 
the personal integrity to lead the Department, and he does not have the ability 
to perform the day to day responsibilities without controversy and without 
making administrative blunders. 

My comments will be in three (3) areas: 

A. Willful violation of the Government Code to intimidate State Employees 

B. Overt and persistent Retaliatory Conduct against State Employees 

C. Sexual Harassment conduct against female employees at the 
Department of Veterans Affairs. 

Professional Background 

Assistant Chief, Appeals Division, State Personnel Board 

For (4) years, I served as the Assistant Chief of the Appeals Division. In 
this capacity I investigated hundreds of complaints regarding 
discrimination, sexual harassment, retaliation, and misconduct on the 
part of State employees, including high level administrators. 

APA and Associates 

I am the Owner and Principal Consultant of APA and Associates. In this 
position I am retained by clients to represent them in a hearing before the 
State Personnel Board, or before an Administrative Law Judge. 



\. 



128 



A. ABUSE OF POWER AND WILLFUL VIOLATION OF THE 
GOVERNMENT CODE SECTION 19592.2 

I. Reference 

Personnel actions taken against State employees at Barstow. 

Over the past 18 months, ten (10) employees have been restricted 
to their home in violation of the Government Code Section 
19592.2. 

II. Employees Affected 

HAND OUT - LIST OF EMPLOYEES 

III. Requirements of the Government Code 

Government Code Section 19592.2, states, " Pending 
Investigation by the appointing power of accusations against an 
employee involving any of the causes for discipline specified in Section 
19572, the appointing power may order the employee on leave of 
absence not to exceed 15 days. The leave may be terminated by the 
appointing power by giving 48 hours notice in writing to the employee." 

HANDOUT- GOVERNMENT CODE SECTION 

IV. Example of abuse and violation of the G C 

In the case of Mr. Fernando Gandara, he was restricted to his 
home on two separate occasions: 

March 26, 1 999 for 30 days - HANDOUT 

October 8, 1 999 - HANDOUT 

V. There are no provisions to exceed 15 days 



VI. G C is there to ensure that State employees have certain rights, and to 
ensure that there is not abuse of power. 

Progressive Supervision - ABC - Not A to Z 



129 



VII. What is the Intent 

Intimidate 

Harass 

Coerce into submission 

Results are Demotion, Resignation, or Transfer 

VIII. Evidence of Intent 

No investigations ever conduct 

F. Gandara letter - No Investigation HANDOUT 

Denise Hall letter - No Investigation HANDOUT 

E-Mail by Bob Gray - Alvarado Mandated HANDOUT 

IX. Impact 

Dignity 
Self Respect 
Suppression 
Career Opportunities 

X. The Department has no discretion to amend the G C 

The Legislature makes the laws 



XI. Conclusion 

Violation of the G C 

Abuse of power 

Abuse of State employees 



130 



B RETALIATION AGAINST STATE EMPLOYEES 

AND VETERANS VOLUNTEERS 

I. Employees affected 

A. Denise Hall - Public Affairs Officer 

B Fernando Gandara - Business Services Assistant 

C. Arthur Benton - Volunteer for Veterans 

A. Denise Hall 

on January 24, 2000, Mr. Alvarado called Denise at her job. 

On January 26, restricted to her home per G C 19592.2 

On February 9, time is extended. 

On February 1 4 returned to work 

Job Duties changed and personal item removed. 

On February 1 1 , Tammie Scholl call to Mr. Alvarado 



B. Fernando Gandara 
Filed a D/C against the Department. 
SPB Hearing February 15. 

On February 9, Mr. Alvarado singles out Mr. Gandara. 
Subpoena to testify May 10, 2000 before the SPB. 
E-Mail from Bob Gray 

C. Arthur Benton 

On or about January 2000 Mr. Benton wrote a letter to Gov. Davis 

Complaint regarding patient treatment, low moral, abuse of 
employees, and waste taxpayers money/. 

Mr. Alvarado telephoned Mr. Benton and told him he had no 
business writing to the Governor. 

The letter was written to the Governor 



131 



Government Code - Discrimination and Retaliation. 

Government Code Section 1 9702 (a) states: " - A person 
shall not be discriminated against under this part because 
of sex, race, religious creed, color, national origin, 
ancestry, marital status, physical disability, or mental 
disability. A person shall not be retaliated against 
because he or she has opposed any practice made an 
unlawful employment practice, or made a charge, 
testified, assisted, or participated in any manner in an 
investigation, proceeding, or hearing under this part. For 
purposes of this article, "discrimination" Includes 
harassment , this subdivision is declaratory of existing 
law." 



III. Personnel Board Hearings 

Charges of RETALIATION are before the State Personnel Board 

Mr. Alvarado will be subpoenaed to appear and explain his retaliatory 
conduct. 

The Administrative Law Judge will find that retaliation did take place and 
Mr. Alvarado will be served with an adverse action. 

IV. Mr. Alvarado is not above the law 



V. Mr. Alvarado should not receive immunity just because he is an 
appointee of the Governor. 



132 
C COMPLAINTS OF SEXUAL HARASSMENT 

I. Sexual Harassment 

Complaints by several female employees 

II. Confusion or misunderstanding 

Complaints can be formal or informal. 

Informal can be verbal, or as simple as a written note. 

III. If you make a Formal Complaint 

it eventually you have to testify on a host of personal matters. 
The investigation becomes a public document. 
Most females are reluctant to file a formal complaint. 
However, most are willing to make a verbal complaints. 

IV. Two letters of Complaint exist 

They constitute an informal complaint. 

They have come forward now, because Mr. Alvarado is seeking a 
higher level position in the same Department in which he is 
accused of Sexual Harassment. 

If the two complaints are not investigated, Mr. Alvarado now has 
more power to abuse women. 

This sends the wrong message. 

V. Duty bound to get the facts 

The complaints are informal, thus they are confidential. 

SRC members are free to conduct a confidential interview of the 
complainants. 

Someone is lying, either the two females who have complained, or 
Mr. Alvarado. 

VI. It would be unconscionable to confirm Mr. Alvarado 



#x 



133 



NUMBER OF PERSONS RESTRICTED TO THEIR HOME PENDING AN 
INVESTIGATION. 



Name 


Job 


Days 


Extended 


Results 












A. Navarro 


Doctor 


51 


yes 


Resigned 


L. Fairbanks 


Nurse 


5 




Resigned 


F. Gandara 


Business AssA 


30 


yes 


Returned 


F. Gandara* 


Business AssA 


10 




Returned 


R. Allen 


Dietetics 


10 




Returned 


1. Hard wick 


Nurse 


60 


yes 


Terminated 


1. Hard wick* 


Nurse 


30 


yes 


Reinstated 


K. Holland 


Nurse 


30 


yes 


Resigned 


D. Hall 


Public Affairs 


20 


yes 


Returned 


L Vu 


Doctor 


30 


yes 


At Home 


D. Place 


Compliance 


14 




on Work Comp 


R. De La Riva 


Procurement 


14 




Resigned 


R. Gray ** 


Administrator 









Restricted to their home twice. 
Threatened with termination, forced to resign 



SENATE RULES COMMITTEE HEARING 



**• 



PART 2. STATE CIVIL SERVICE 

Chapter 7. Separation from Service 

Article 1 . Disciplinary Proceedings 

Government Code Section - 19571 - In conformity with this article and the 
board rule, adverse action may be taken against any employee, or person 
whose name appears on any employment list for any cause for discipline 
specified in this article." 

Government Code Section 19572 - "Each of the following constitutes cause for 
discipline of an employee, or person whose name appears on any 
employment list:" 

(a) - Fraud in securing employment 

(b) - Incompetence 

(c) - Inefficiency 

(d) - Inexcusable neglect of duty 

(e) - Insubordination 

(f) - Dishonesty 

(g - Drunkenness on duty 

(h) - Intemperance 

(i) - Addiction to the use of controlled substance 

(j) - Inexcusable absence without leave 

(k) - Conviction of felony 

(I) - Immorality 

(m) - Discourteous treatment of the public or other employee 

(n) - Improper political activity 

(o) - Willful disobedience 

(p) - Misuse of state property 

(q) - Violation of this part or board rule 

(r) - Violation of the prohibitions set forth in accordance with 

Section 1 9990 ( ) 

(s) - Refusal to take 

(t) - Other failure of good behavior either during or outside duty hours .... 

(u) - Any negligence .... patient of a state hospital 

(v) - The use of .... target practice .... 

(w) - Unlawful discrimination, including harassment, on the basis of race, 

religious creed, color, national origin, ancestry, disability, marital status, sex, or 

age, against the public or other employee while acting in the capacity of a state 

employee. 



Government Code Section 19592.2 - Pending Investigation by the 
appointing power of accusations against an employee involving any of the 
causes for discipline specified in Section 19572, the appointing power may 
order the employee on leave of absence nor to exceed 15 davs . The leave 
may be terminated by the appointing power by giving 48 hours notice in writing 
to the employee. 



> <^Mi 135 

TATE OF CALIFORNIA €l ^ 'ETE WILSON. Governor 



APARTMENT OF VETERANS AFFAIRS 

cicrans Home of California - Barstow 
00 E. Veterans Parkway 
larstow, CA 92311 
760) 252-6200 




XfTrJK 



March 26, 1999 



Fernando Gandara 
6105 Honeysuckle Lane 
San Bernardino, CA 92407 

Dear Mr Gandera: 

Under Section 19592.2 of the Government Code, you are hereby ordered on 
paid Administrative Leave pending inquiry of allegations of unprofessional cond uct at 
the Veterans Home of California - Barstow. This Administrative Leave will be for a 
maximum of Thirty (30) days beginning with Friday 26, 1 999 and ending at close of 
business S Fnday April 23. 1999 

You are to keep yourself available for communication by telephone between the 
hours of 8 00am And 5 00pm. If we need to contact you, we will contact you at (909) 
880-1708. 

You are also notified that you are not permitted to be on the Home grounds 
during the above 30 day period, unless instructed to do so. 

If you have any questions or wish further information, please contact me at (916) 
653-2535 



Sincer 




Joy Hempstead. Cyrief 
Personnel Management Division 



- 2f- 

PUTTING VETERANS FIRST 



[ , 136 

STATE OF CAUFORN1A ^C GRAY DAV]S - Governor 



CALIFORNIA DEPARTMENT OF VETERANS AFFAIRS 

VETERANS HOME OF CALIFORNIA - BARSTOW f 

100 E VETERANS PARKWAY f^ 11 ^— ; 

BARSTOW. CALIFORNIA M3 1 1 \ I p 

CM) 252 6200 *• 

October 8, 1999 



Fernando V. Gandara 
Procurement Services 
Veterans Home of California-Barstow 



Dear Mr. Gandara: 

Under Section 1 9592.2 of the Government Code, you are hereby ordered on paid 
administrative leave pending evaluation of your performance of duties as Business Services 
Assistant at the Veterans Home of Califomia-Barstow. This administrative leave will be for a 
maximum of five days beginning on October 8, 1999. 

You are not to return to the Home grounds before October 15, 1999, but are to keep 
yourself available for communication by the telephone from the Home, Monday through Friday 
between the hours of 8:00 am. to 5:00 p.m. 

Please be advised that prior to returning to duty on October 15, 1999, you are to contact 
Mr. William Rigole, Deputy Administrator, at (760) 252-6255 for further instructions. 

You are also notified that you are not permitted to be on the Home grounds during this 
five-day period. This leave may be terminated by the appointing power by giving notice to the 
employee. 



Sincerely, 







ROBERT GRAY 
Administrator 



cc: Personnel Officer 
OPF 



rrni^vr. VfTTTTDANS CTNPF. 1046 



FROM : SmokeyTheMi ncr 



FAX NO. : 9098865828 



STATE Of CALIFORNIA 



yte 



Qpr. 18 2090 08:35PM PI 



137 



GRAY DAVIS, liroveroof 



DEPARTMENT OF VETERANS AFFAIRS 

VETERANS HOME OF CALIFORNIA-BARSTOW 
100 E. VETERANS PARKWAY 
BARSTOW, CALIFORNIA 9231 1 
1760) 252-6200 




(/ 



April 14, 2000 



Mr. Fernando Gandara 

6105 Honeysuckle Lane 

San Bernardino, California 92407 

Dear Mr. Gandara: 

This letter is in response to your letter of April 1 1, 2000, requesting a copy of a report 
of the investigation of "allegations of unprofessional conduct" on your part. 

You were placed on paid administrative leave on March 26, 1 999, for a period of 30- 
days. Your official personnel file (OPF) contains all pertinent information relevant to any 
actions concerning your employment at the Veterans Home of California- Barstow, and you 
are entitled to review your file at any time by contacting the Personnel Office. 

Sincerely, 



is V M 



JOHNR.HELTSLEY,F 
Administrator 




SERVING VETERANS SINCE 1946 



138 




Letter from Bob Gray, former Administrator at Barstow stating that Mr. Atvarado 
directed that he be placed on forced administrative leave. 



December 27. 1999 



Dt Alfonzo Navarro: 

I am sorry to bear that you are still on paid administrative leave from the Veterans Home- 
Barstow. I want you to know that it was not my decision to place you on administrative leave. That was a 
directive that was given to me by Secretary Tomas Atvarado. If you remember, I was given the directive 
to place you on administrative leave after the newspaper article in October came out about the Health 
Inspection. Although I disagreed with the decision, I had no choice about the action for I was threatened 
to be terminated myself. 

While I was the administrator at the Veterans Home-Barstow, I constantly sought your advice 
because of your knowledge and experience. In no way, do I fed that you were responsible for the poor 
health inspection. In fact, I know that j:j v::: very thorough with your job performance. You did 
monthly reviews with the other physicians and the contracted physicians at the facility. I know that you 
did audits of their performance and of their documentation. You did 100S death review audits. If there 
was any concern regarding a physician and what he did, I know that you would hire an outside physician 
to investigate the incident and to give you an objective opinion. You never had any problem filling in for 
any physician if someone called in sick. You saved the State money by close observation of the residents 
when they were at the hospital and you always audited the invoices of our contracts which saved the State 
considerable amount of money. I always felt that you performed above and beyond my expectations of a 
Chief Medical Officer and I can't understand why they decided to place you on administrative leave. I 
had communicated to Tomas Arvarado and to Jerry Rocker, Undersecretary of Veterans Affairs, of your 
intentions to retire in January 2000. With this knowledge, I can't understand the actions that they have 
taken against you these past months. I wish you the best in the future and if I could be of any assistance, 
please feel free to contact me. 




Robert Gray, Administrator 



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139 



140 



CAL-VET farm and home loan program 

INVESTIGATIVE COMMITTEE 

Senate Rules Committee Confirmation Hearing of Tomas Alverado 



RE: Tomas Alverados complicity or incompetence, false statement, and 
malfeasance in office, relative to the diversion of hundreds of millions of 
dollars in "1943 Fund" or Cal-Vet Home Loan Bond "and" program monies. 

Tomas Alverado had a knowledge of, and has acted with malfeasance in office, and has 
helped to conceal, and made false statements regarding the fact that there have been 
massive fraudulent "diversions of hundreds of millions of dollars [perhaps billions] from 
the Cal-Vet Federal Tax Exempt Bond Sale generated money and from Cal-Vet 
program money dating from at least 1981/82 through 1996. 

Tomas Alverado was first made aware of the fact of the diversion of Cal-Vet Bond 
Funds, and given the supporting documentation by myself, in the fall of 1997. Tomas 
Alverado was working on then candidate Gray Davis's Campaign Committee for 
Governor. Several days after receiving the documentation Mr. Alverado informed me 
that because the information could be embarrassing to both himself and Gray Davis, it 
would not be used in the campaign. Tomas Alverado was further advised of these 
diversion of Cal-Vet funds in letters he received addressed to James Ramos, Former 
Secretary in the spring of 1998 and to Governor Gray Davis in the fall of 1999. 

As recent as March 16, 2000, Tomas Alverado in a letter addressed to John Cantfield, 
the Assistant Legislative Officer for the "Veterans Affiliated Council" of Sacramento, did 
make the following blatant "false statement" as it regards the illegal "diversion of 
billions" of dollars of Cal-Vet Bond Funds: 

"...your group should rest comfortably with the knowledge that the 
department's [DVA] operations are... sound and without any hint of 
improper activity" 

Nothing could be further from the truth. The facts are the following: 

A. From at least 1981/82 fiscal year through 1996/98 $5.6 billion in Cal-Vet G.O. and 
Revenue Bond money was raised from the sale of Cal-Vet Bonds to allegedly fund 
75,274 new or post 1980 Cal-Vet home loans. The DVA's own financial data makes 
it a virtual "mathematical impossibility" that these loans could have been made, 
and that $5.6 billion was spent to fund these phantom Cal-Vet loans. 

B. Roughly $1,375 billion of this Cal-Vet Bond Fund money appears to have been 
fraudulently diverted between 1990 and 1994, i.e., when Thomas Alverado was the 
DVA's Deputy Director, under Jay Vargas and Pete Wilson's administration and he 
had direct administrative authority over the operation of the Division of Farm and 
Home Loans. 



141 



C. Roughly $7 billion in "1943 Fund" or Cal-Vet Program [ principle and interest 
payments from 115.000 veterans dating back to 1981 1. was illegally diverted out of 
the Cal-Vet or "1943 Fund" to help pay the bond debt service cost on billions of 
dollars that had never been used to finance a single Cal-Vet home loan. 
Approximately $3 billion of these Cal-Vet program monies were diverted during 
Tomas Alverado's tenure as Deputy Director between 1990 and 1994. Tomas 
Alverado's acts and his statement that the "program is sound and without any 
hint of improper activity" is clearly malfeasance in office. 

D. The fraudulent acts discussed herein have caused California's war veterans to pay 
hundreds of millions of dollars in overcharged interest, i.e. an 8% one-year variable 
interest rate instead of the 3% to 4% veterans should have been paying between 
1981 and 1998. Much of this overcharged interest was paid between 1990 and 1994 
when Tomas Alverado had direct administrative authority over the Division of Farm 
and Home Loans. Today, Tomas Alverado wants to be confirmed as Secretary of 
the State Department of Veterans Affairs. Cal-Vet Contract Holders are asking 
this committee NOT TO CONFIRM Tomas Alverado as Secretary of the State 
Department of Veterans Affairs. 





n L. Debbs 
-Chair CVFHLPIC 



Of Sacramento. California And Vicinity ,Sln« 192L 



3416 Hraeburn Street 
Sacramento, CA 95821 
March 10,2000 

Secretary Tomas Alvorado 

California Department of Veterans Affairs 

Sacramento. CA 958)4 

1 )ear Secretary Alvarado, 

<. )n January 1 2, 2000 The Veterans Affiliated Council of Sacramento and SiuTOunding 
.Areas (VAC) had Mi. John Debbs as guest speaker. Mr. Debbs represented the Cal-Vet 
1 arm and Home Loan Program Investigative Committee. Mr. Debbs raised a number of 
allegations concerning actions by CDVA which his group believes have been illegal and 
fraudulent including diversions of billions of dollars from the CJ-Vct Tim* and Home , 
I oan Program. 

This is a very complex situation, llie VAC docs not know whether these allegations are 
true or not. ttcforc wc take any position on this matter, we need answers for these 
following questions or issues: 

1 . Were in fact approximately 75,274 "new" post 1980 Cal-Vet home loans entered into 
between 19X1/82 fiscal year and 1986, ie. in addition to the 1 10,000 Cal-Vet loans 
existing in 1 9807 

2. Was approximately $4,926 billion in Cal-Vet G.O. and Revenue Tax iixempt Bond 
money in fact used to fund the above 75,274 "new" or post 1980 Cal-Vet home loans, 
i.e. between 1980 and 1996? 

3. Did the number of existing Cal-Vet home loans steadily decline every fiscal year from 
approximately 1 12,(XK) loans in 1982 down to roughly 39,000 in 199o? 

4. Was the annual average prepayment experience approximately 5.6"'o to 6.0% for Cal- 
Vet loans for the time period between 1981 and 1996? 

5. Did the maximum total increase in the actual Cal-Vet real estate owned or receivables 
under contract of sales ever exceed SI. 035 billion between 1980 and 1996? 

6. Are there existing micro-data impound account tax payment records available for 
each Cal-Vet home loan entered into back to at least 1980? If not, where are these 
records? 



■H 



143 



contract «„.*,. SKciRE&Sa*" """ * '"*"*' "* 
" u^i:./ hiS $1 ■' Mi0n in Ca, ' V ? *- — r ascd ifno, „ the making of 1()am 

-X^s« Kfi^atEr^"' bascd - ■— - 

Statement of IXmd,. Aud " rc P orts . »nd the Slate l re a su , cr ' s official 

corned about ,hc ^^t^XSSSjft J,*^ " "" 
requirement,,. Some veterans with Cal-Vet lLi« , and d * ab,ta J' durance 

their home, unle)ls rcmedica J'* C fo tVV e ron^h T 1 T ° f ^^ have ** 
H-d those a n c&ltions by M , ^2* Q££Z£Z. -* VAC member, 

VAC Ute any position. ***** "• ^ Sen °" s mi need *> be answered before the 



Sincerely, 

Jolin H. Canfleld 
Assistant Legislative Officer 



«: (fovwnor Gray Davis 
CWTDR. - Katherinc Robin 






DKPARFymi HKVT.l RRANS AFFAIRS 

s\i lUMtMH.i vYllWTVl.V 44:^5-0001 




uki< « c>!(. K.?» 



March l(). 2000 




John II Can field 

Assistant I cgtslativc Officer 

Veterans AfTiliatCiJ Council of Sacramento 

34 \u Rruchum Street 

Sacramento. CA 95821 

Dear \{ 

I appreciated your letter expressing interest in the Department's Cal-Vct Farm and Home 
Loan Program. You write about numerous claims raised by Mr. John Dcbbs regarding alleged 
diversions of "billions of dollars" from the Cal-Vct Farm and Home Loan Program. I was pleased 
to hear that VAC members who have, or have had, Cal-Vet loans speak highly of their experience 
with the Cal-Vet Farm and Home Loan Program. You stated that "many VAC members find 
these allegations by Mr. Debbs and his group difficult to believe". 

Because Mr. Debbs is the lead plaintiff in a lawsuit against the Department regarding 
Farm ajul Home Loan Life and Disability reserves, wc believe it inappropriate to comment on Mr. 
Debbs' allegations. We can, however, communicate to you the state of the public record in that 
cas:. The record amply demonstrates the Department's strong denial of any wrongdoing 
regarding its handling of Cal-Vct Life and Disability Program reserves. 

Further, with respect to the allegations of "diversions of billions", your group should take 
comfort and maintain its confidence in the Cal-Vet Farm and Home Loan Program because of the 
extent of public scrutiny and ongoing independent audit processes which constantly examine Cal- 
Vei's operations. The Cal-Vct Program is audited annually by the outside firm ofDeloittc & 
Touche. Thai audit is part of the annual report from the Department to the Legislature which 
examines the Department's operations. Further, the Department reports to the Legislature 
annually on the state of its insurance programs. In addition, the Department of Veterans Affairs' 
operations are subject to constant internal audit by the Audit Unit of the Department. 

In addition, as the need arises, from time to time, the Bureau of State Audits, audits the 
Department's programs. And if this is not enough, outside bond consultants constantly examine 
the Department's operations in order to assure full disclosure of the Department's operations and 



SERVING VETERANS SINCE 1946 



145 



John H. Cunficld 
March 16, 2000 
Page 2 

programs to purchasers of bonds which are used lo fund Departmental programs. 

Finally, pursuant to new Stale law, which went into effect on January 1, 2000, the 
Department's operations arc now subject to examination by the new Inspector General for the 
Department of Veterans Affairs. The Inspector General reports to the Governor. 

Your group should rest comfortably with the knowledge that the Department's operations 
arc constantly subjected lo examination to assure that its programs are sound and without any hint 
of improper activity. Undoubtedly because of that examination process, the bond rating for Cal- 
Vet Bonds has been equal to or higher than lhat of general State of California Bonds. 

Please feel free to let me know if you have any further questions about the Department's 
operations. 



ycry truly yours, 




Tomas Alvarado 
Secretary 



'*.<* 




DUDUGJIAN & MAXEY 

A LAW CORPORATION 



14( 

13 SIERRAGATE PLAZA BLOO.j 
ROSEVILLE, CAUFORNIA 9S678-66I 

TELEPHONE (916) 786-72. 

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E-MAIL: thefirrrvgdudugjian-maxty.co 

vwbslte: http://www.duduqiian-ma»eyxo 



: 



April 27, 2000 



The CaJ-Vet Farm and Home Loan Program 

Investigative Committee 
c/o John L. Debbs 
7589 Eddy Lee Way 
Sacramento, CA 95822 



Re The Cal-Vet Farm and Home Loan Program 



Dear Mr Debbs 

This letter will verify that I have been retained as a Certified Public Accountant and as an expert 
witness to perform an investigation and analysis into the Cal-Vet Farm and Home Loan Program. 

I have been retained by the Cal-Vet Farm and Home Loan Program Investigative Committee. My 
investigation and analysis is not complete at this time. There does appear to be substantial 
discrepancies between the amount of funds owed by the Cal-Vet Farm and Home Loan Program and 
the amount of receivables under contract of sales or actual real estate owned by the Cal-Vet Farm 
and Home Loan Program. 

There appears to be a significant discrepancy between the number of loans reported to have been 
entered into between 1980 and 1995 and the number of loans outstanding as of 1995. The reported 
pre-payment percentages do not support the program having entered into as many loans as were 
claimed during this period of time given the amount of loans outstanding as of 1995. It appears that 
a significant amount of bond funds have not been used to make Cal-Vet Farm and Home loans. 

When I have completed the investigation and analysis, I will more fully report upon discrepancies 
which appear to exist in the Cal-Vet Farm and Home Loan Program. 



Very truly yours, 




JDM:lgj 



147 



Testimony offered by George MacClanahan at the confirmation hearing of Tomas 
Alvarado before the Senate Rules Committee chaired by Senator Burton, on May 8, 2000 . 

My name is George MacClanahan. I am privileged to be a resident of the California 
Veterans' Home at Yountville. I am beginning my fifth year there and the last year and one-half 
of that stay has only been possible because of a life saving operation that was performed on me at 
the medical research facility at the University of California at San Diego. The procedure that was 
employed was considered to be somewhat experimental and was not available at other medical 
facilities in the area. I have been told by qualified medical authority that the saving of my life 
comes close to being a medical wonder of sorts. 

That operation was facilitated by and performed under the auspices and through the 
intervention of the medical staff at the Veterans' Home. I literally owe my life to the Home and 
to the professional staff that is employed there, who diagnosed my ailment and had the knowledge 
of the proper methods and the facilities available for surgical intervention, together with their will 
to 'make it happen.' Without them I would have died. Because of them I can look forward to 
an unknown number of additional years of productive life, which I intend to use working for the 
betterment of conditions affecting the lives of veterans. It is my determination to pass on to the 
members of this fragile and rapidly disappearing brother- and sisterhood, the hope and 
inspiration that others have bestowed upon me. Nothing short of that intention could prompt me 
to come here and deliver the statement I am about to make. 

Veterans of all kinds and distinctions go to the Veterans' Home to spend the last years of 
their lives. They go mostly because of ill health, but sometimes they go because they are 
lonesome, or afraid, or impoverished, or apprehensive, or troubled, or uncertain, or because they 
feel misplaced in time in the outside world and the values of that world are no longer their values. 
In many cases they go because they want to be near those with whom they share a kinship; that is 
to say, other veterans. Except in rare instances, the Home is not a rehabilitation facility intended 
to retrofit members for return to life outside the Home. It is instead a last refuge for them, a 



1 



148 



ha\en, and for when there is need for such services, it has a hospital with a remarkably capable, 
understanding, and caring staff, and finally, it has a Veterans' Cemetery where their comrades 
wait. But until their time for that transition comes, these men and women need recognition for 
the contributions they have made to society and to their country. They need the respect that is 
their due for the path they chose at a time when America's future was on the line; and beyond 
that, simply for the accumulated wisdom of their years. They certainly do not need to be made to 
feel like the village idiot or a social pariah. 

At a time when Mr. Alvarado had first come on board as Deputy Secretary under James 
Ramos, John Schmucker and I met with him on the subject of the Post Fund. When Governor 
Davis appointed Mr. Ramos as Secretary of the Department of Veterans Affairs, I asked for a 
meeting with Ramos regarding the future of the Post Fund. I was then Chairman of the Post 
Fund Budget Committee for the Allied Council. Mr. Ramos agreed to a meeting in Sacramento 
and asked me to bring John Schmucker along. Mr. Schmucker was at that time the Chairman of 
the Allied Council. 

When we arrived for the meeting Mr. Ramos was otherwise occupied and asked Mr. 
Schmucker and me to meet with Mr. Alvarado. After the conversation had touched on some 
other things I brought up the matter of the Post Fund. The instant Mr. Alvarado understood that 
I was going to express an opinion and perhaps offer some advice about the Fund he interrupted 
me in mid sentence, saying "You don't even know what the hell you're talking about." He didn't 
bother waiting to hear what I had to say. His manner was insulting and his comment was clearly 
designed to bully me into silence about a subject of which he knew nothing at all and was not 
prepared to discuss. He simply took the standard company line. Any other action, such as 
listening while a Home Member expressed his or her views, would have been beneath his dignity 
and totally out of character. 

I have no doubt that Mr. Alvarado had been briefed on my role as an activist in the effort 
to save what little remained of the Post Fund resulting from the predations of the Administration 



149 



in Sacramento that began during the economic recession of the early nineties and continued until 
the Legislature rescued the Fund last year. This angry, parental type of posturing has been a 
common defense that has been universally used whenever there is the least hint of dissension or 
activism on the part of Home Members, for as long as I have lived in the Home. 

During my residency at the Home I have worked continuously at the Member 
Employment Office, except for about seven months when I was recovering from my operation. 
Member Employment, although not originally intended to be the exclusive function of the Post 
Fund, had gradually become totally dependent on the Fund, due to the Fund's convenience as a 
source of non-appropriated capital, which the administration could spend without legislative 
oversight. The Post Fund, recently renamed the Morale, Welfare and Recreation Fund, is best 
described as a public endowment to the Home's membership from the citizens of California. As 
part of my job I contributed to the periodic entries into the records of the Fund and in the 
furtherance of that activity, I made a comprehensive analysis of the trends of Fund balances and 
expenditures. At the time the Davis Administration was ushered in, I probably knew as much 
about the Fund , at least the Member Employment aspects of it, as any person in the Department's 
finance section, whether in Sacramento or in Yountville. For one thing, I knew the Fund was 
heading for insolvency within the next three years and so warned the Administration. (Actually, it 
happened in one.) I also knew that its precipitous depletion was directly attributable to the illegal 
and irresponsible diversions made by Department officials to defray certain operating costs of the 
Home. 

When Mr. Alvarado made his disparaging comment, by its tone and manner suggesting 
that I was nothing more than a meddlesome ignoramus, all the hope that had come with Governor 
Davis' electoral victory and Mr. Ramos' appointment escaped like hot air from a punctured 
balloon. It is a very humiliating experience to have one's concerns dismissed so scathingly, 
especially in front of one's friends, as though they were nothing more than frivolous claptrap. It 
was also extremely rude on the part of Mr Alvarado to do so and it speaks volumes about his 



150 



complete lack of leadership skills. Fortunately, Mr. Ramos came in at that precise instant and 
invited Mr. Sehmueker and me into his office and the meeting with Mr. Alvarado ended. 

It is no great secret that for the last four years, of which I have a personal knowledge, and 
tor at least another five preceding that, this agency that is entrusted with the care of California's 
aging war veterans has been staffed in its upper echelons by officials who have themselves 
displayed, and permitted in their underlings, an attitude of contempt toward the veterans in their 
care. That attitude is so prevalent, in fact, that people, both in and out of the Home, have begun 
to accept it as the norm. On January 30 I wrote a letter of reprimand to the Deputy 
Administrator of the Home for the derogatory manner in which he addressed Home members 
during a meeting I chaired. That man is an appointee of Mr. Alvarado. In April I was advised by 
at least seven other sources including two State employees that the man continued to verbalize 
disrespect directed at the Home membership. I wrote another letter to him, sending copies of that 
letter and the first letter to a number of people including Mr. Alvarado. Soon after, the Deputy 
Administrator made a precipitous departure from the Home and I was advised by an official of the 
department that while he would continue his employment with the Department, he would no 
longer be involved with Home responsibilities. Last Tuesday I found out that this man, who holds 
such low opinions of Home Members, was working in the Sacramento office, preparing the 
Home's budget for fiscal 00/01. That is disgusting. It is not unusual for Home Members to be 
lied to by officials of the Department. It happens regularly, with impunity. The real crime here is 
that an individual, who holds such alien views towards veterans, was given carte blanche authority 
to prepare the Home's budget. This is the same individual who prepared last year's budget and 
the home is now $3.9 million in the red as a result. Rather he should have been discharged. The 
individual who protects and defends him dishonors the Governor and he dishonors the Home 
Members and he dishonors his fellow employees. 

Such a state of affairs is unconscionable, and the very idea of these kinds of conditions 
should be abhorrent to even the most callous and disinvolved person. No other single issue 
outstrips, in order of magnitude, the hurtful act of crushing the human spirit. When the spirit that 



151 



is crushed resides within an elderly person, man or woman, especially one who has spent a lifetime 
trying to do what is morally right, it is a devastating and dehumanizing experience. 

Mr. Chairman, you are in receipt of a letter signed by the Chairman of the Allied Council 
endorsing Mr. Alvarado for the position of Secretary of Veterans Affairs. The assertions in that 
letter are fashioned of whole cloth, without a shred of truth. Not a hint of a canvass was ever 
made to determine what the one thousand, one hundred and twenty-five Home members actually 
do think on the subject of Tomas Alvarado as Secretary of the Department, if, in fact, they have a 
preference at all and would dare to voice it. As to the preference of the Home's nine hundred 
employees, to say that they endorse Mr. Alvarado is the rankest joke conceivable. I have asked 
everyone in sight and I find very few votes, member or employee, for Mr. Alvarado. I don't 
know why the Chairman of the Allied Council misstated the facts in such a potentially damaging 
way. Perhaps he thought it was the politic thing to do. 

The leadership of the three million veterans that reside in California should rest with a man 
or woman who holds the veterans' interests, rather than their own, close to their heart. Mr. 
Alvarado misses the mark widely in that regard. The responsibility for the protection and well- 
being of veterans should lie with one who is, in fact, a veterans' advocate, not just one who claims 
that distinction, but one who believes in advocacy to the extent he will not tolerate from any 
source the self-serving desire to humiliate the meek or the less fortunate, which, as we have 
seen, is the ultimate expression of Mr. Alvarado's style. 

Mr. Alvarado carries far too much baggage, some of it of the sleaziest kind, damning if 
true, and unfortunate even in its best light, to be a unifying and effective voice in the advancement 
of veterans' interests. Finally, he has neither the temperament, the education, nor the experience 
to do an adequate job of directing the personnel of the Department of Veterans Affairs in the 
demanding task of rebuilding the Department from the ground up, which must by definition be the 
backbone and the heart of any effort to make the Department worthy of the three million 
veterans it represents, and who Governor Davis has indicated it is his intended purpose to honor. 



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